Wisconsin 8 unit deal analysis

[Michael Brunner]

Hello,

I'm looking for some guidance analyzing my first greater than 4 unit deal.

The property is listed slightly under 900k. On the same property, there is a brick 4 unit and 2 separate duplexes for 8 units total included in the deal.

Below is the P&L the realtor just sent me, along with the rent roll.

To me, right off the bat it seems like they are really low balling the expense side of things (not taking out for vacancy (though they claim vacancy is never more than 1 month, so should we remove 8%?) or capital expenditures, etc.), so I'm not sure how much I trust their $62,8xx yearly profit projection. However, using the 50% rule and checking out some online commercial loan calculators, I believe the deal could work, depending on what kind of interest rate I can get.

Please correct me if I'm wrong. Most banks would require 20%+ down (~$180,000) on an 8 unit property, right? While I don't quite have the down payment amount saved up right now, I'm hoping to team up with my family (1 aunt and 1 uncle, they both own rentals) in some kind of joint venture deal where they bring a larger percentage of the down payment funds to the table as silent partners and I manage the logistics of the deal. Has anybody done this with family before? If so, would you recommend it?

Assuming the family deal falls through, what kind of alternative financing would you recommend I look into?

Finally, do people also use the 1% deal for more than 4 unit properties? If so, it fails that test.

"Expense/Net Sheet

Monthly Income $7,070.00

Monthly Expense 

Utility $190.00
Lawn Care/Snow Removal $25.00
Trash Removal $67.00
Advertising $0.00 Craigslist and signage in yard
Insurance $235.00
Odd/End Repairs $75.00
Total $592.00

Yearly Annual Income $84,840.00
Yearly Annual Expense $7,104.00

Property 2014 Taxes $14,844.46

Yearly Profit $62,891.54

Unit Bedroom Bath Stove Fridge Dishwasher Microwave Washer Dryer

409 #1 2 1 Y Y N N N N Y 2008 2001 2002

409 #2 2 1 Y Y N N N N Y 2008 2001 2002

409 #3 2 1 Y Y N N N N Y 2008 2001 2002

409 #4 2 1 Y Y N N N N Y 2008 2001 2002

401 3 2 Y Y Y N Y Y N 1997 1997 1997

403 3 2 Y Y Y Y Y Y N 1997 1997 1997

405 3 2 Y Y Y Y Y Y N 1997 1997 1997

407 3 2 Y Y Y N Y Y N 1997 1997 1997

Garage and Common Area Electric is paid for by Landlord *I assume this is the $190 / month utility figure listed in the monthly expenses.*

$208/quarter for dumpster *I'm not sure if trash collection is this or if we have to add another $70 per month for the dumpster.*

Fence was put up in 1997"

Thanks,

Mike