Numbers for a Multifamily Property Analysis

[Jay O.]

Happy New Year once again everyone. Hope everyone had a safe and great one. Wishing every one an even better year in REI and every other goal you plan to acheive in 2014.

Just wanted to know how do these numbers look for a 8 unit Multifamily, BP Guys/Gals? Property is in the Southeast Market. I'll be putting down 30%. Possibly my first Multifamily purchase! Let me know before I sign....The dotted line! Thanks a million!. :)

Cost Analysis Performed as Rental Property

$400K

In:Southeast Market

8 Unit Multifamily

Completely Remodeled, Renovated and Updated

Conveniently located to restaurants, downtown, shopping, etc....

Additional Income from Coin-Operated Laundry

Corner Lot, Great Frontage

Rent - $68,940.00

Out:
(Annual) Actual Taxes - $3,651.00
(Annual) Estimated Insurance - $2,280.00
(Annual) Property management (optional) - $5,515.20
(Annual) Misc -$10,956.00

Net:$46,537.80

Earn:
Total yearly equates to -$46,537.80

CR: 12%

• Net Operating Income

  $45,421

[Jeff Greenberg]

@Jay O. The bank will most likely require the 12t. Many times mom and pops keep lousy records and comingle funds, which makes it difficult to re construct the books. They should be able to provide you with RR and you can use the 50% rule to get a good idea if this is a deal. The unknowns are the deferred maint. during your DD have a property inspector evaluate the property. You go through every unit and audit the leases and applications. You are not just buy a property, but a business as well and need to know how it is performing.

"No mortgage. Title is clear. Tenants in place; some newer and some longer term. Washer/dryer utilities convey. Property management in place. No damage. New roof.Not a war zone. Individual heating/cooling per unit"

How old is this new roof? What damage is the broker not aware of? How old are the HVAC units? How old is the property? When was the last renovation off the units? Will the owner carry the note? What does the neighborhood look like?

Ask lots of questions!!