Deal analysis on a sixplex

[Account Closed]

Asking price $350,000

Fully renovated this year.

Rent $675 per unit = Total $4050 All are 2 bed, 1 bath

Taxes $400 yr current owners numbers

Insurance $2,000yr current owners numbers

Water $270

PM $405

Maintenance & Vacancy $500

Payment $ 1,850.00 , includes Taxes and INS

Net $1,025.00

Located in Powder Springs GA I'm an hour and a half drive so I could manage myself and pocket the extra $405.

[Trent Currie]

Let's do a simple 50% rule calculation on this deal. Even though I agree with @Edward Burns and @Mehran K. that your expenses are going to be more. I would say if you are responsible for the grounds keeping, common area utilities, and the water/sewer you may be closer to 45% or 40%(the 60% expenses that Mehran quoted).

4050 x .5 = 2025 x12 = $24,300 net income before debt service

24,300 / 350,000= .069 or 6.9% cap rate

Keep in mind that 350,000 doesn't even include your inspections, loan origination, closing costs, or other costs associated with a typical transaction.

At 6.9% it could be a fair deal for the market. However it most certainly won't help you grow your business.