24 unit Apt Deal

[Brian G.]

Here is a deal I've come across and was hoping to run some numbers by you guys to see how my deal analysis skills are coming along. PLEASE point out any errors/misassumptions.

Deal Information As It Was Given To Me:

2 brick buildings
24 units total
Price $760,000
22 2-bed rooms, average monthly rent = $500
2 1-bed rooms, average monthly rent = $450
Every unit has a seperate gas hot water tank + seperate gas heating furnaces

Annual Rent Income = $141,720

(Building would have to be at 99% occupancy for the past year?)

Expenses = $53,742

(Expenses only 38% of income?)

Real Estate Taxes $25,732.00
Insurance $3,928
Water & Sewer $19,812.00
Electric $1,000
Trash $3,000
Snow $270

Right off the bat, I'm wondering where are the expenses for maintenance and management, and I'm sure there are other expenses I've overlooked that need to be included also.

By these figures, the is NOI = 87,978, giving a cap rate of 11.5% buying at the listed price of $760,000.

Now, I'm thinking these expenses are way too low, so now I'll plug in the 50% rule.

Annual Rent Income = $141,720

Annual Expenses = $70,860

NOI = $70,860

At the listed purchase price of $760,000, this would be a cap rate of 9.3%.

$70,860/12 months = $5905.00 NOI per month

$760,000 @ 9% for 30 yrs = $6,115.13 monthly mortage payment

For a NEGATIVE cash flow of $210.13 per month.

So, shooting for $100 cashflow per unit, I would need to purchase at around $435,000.

I pulled the 9% interest rate + 30 year term out of the air, so any corrections on the reality of such a mortgage are appreciated.

Do my calculations look right?

Thanks for the help.

Brian