10 plex analysis

[Jocelyn Hinz]

Hello everyone,

We're looking at a deal and would love some input from some veterans. This is a 10 plex in our town, just five minutes from our house. We would do the property management ourselves at least initially, but of course I'm factoring in those numbers because the goal would be to turn it over to a property manager some day. Here are the numbers:

Asking Price $495,000

(they had it listed at 399 about a year and a half ago)

Year Built: 1995

(10) 2/1 units, 1100 sq ft townhouse style with laundry in attached shed, very poor design on laundry in unheated space)

$6175 Gross monthly rent (9 units@625, 1 @ 550)

$74100 Gross Annual

$6272 Taxes

$1900 Insurance

$7410 Property Manager (figuring 10%)

$950 Garbage

$4968 Water/Sewer

$7410 Maintenance and repairs (figuring 10%)

$1200 Snow/Lawn

$7410 Vacancy (figuring 10%)

$37520 Total Annual Expenses

$36,580 Net Operating Income

Thinking we could get it around $425,000 so 8.6% cap rate

I know I need to factor in the loan/closing costs, I'm in the initial phases of finding out what that would be. Any input is much appreciated, thank you in advance