Can you help double check my numbers?

[Mark K.]

My friend put me in touch w/his friend who is an investor (and trying to raise money).  We talked on the phone yesterday and he sounded like a knowledgeable guy.  He then emailed me an "Investment Summary".  I can't figure out if it's a deal he's already done or something he prepared for other potential investors.  There is a lot of missing info and I had to try to piece some of the puzzle together for myself.  It was actually great practice b/c I'm a newbie and this is helping me a lot.  

Anyways, either something just seems very off about this "deal" or my calculations are way off.  Below is a portion of an email I am sending him asking him to confirm/verify my numbers.  Will be interested in hearing his response vs. what you all have to say.

• Not sure if this is a buy and hold or a flip
• What does Cash on Cash 1.43x mean? I typically seen it expressed as a %, does it mean 143%, probably not b/c that's astronomical
• I see the going in Cap Rate but do not see NOI
  • Based off Property Price ($1.07MM) and 4.54% going in CR, this means NOI is roughly $48.8K, is this correct?
  • I will just assume NOI is correct, based off the $1.39MM loan, that would mean $80K in debt services ($6,665 x 12), leaving a $-31.2K cash flow a year, that makes no sense haha
• Now we have cash flow for year three, we get a -6.7% cash on cash return, again makes no sense
• Using year 3 sale price as an example ($2.48MM) and the 5% cap rate listed, this means annual NOI is $124K
  • Debt service is $80K, leaving $44K in cash flow, can you confirm this?

[Ned Carey]

@Mark K.

Probably means the person that said it doesn't know what they are talking about.  I never heard it expressed that way. Oh I bet he means 43% total return on original cash investment after 3 years (or 5 or 7 years)  Not a very useful number. 

Well not necessarily. Is that before repairs or after? Pro forma implies repairs are needed.

Exactly what is the point of a projection if you don't even include income. Income is the whole reason people buy income producing properties. 

$179K per unit seems outrageously high to me.

None of it make sense. There simply is not enough info to analyze this property.