Would you buy this deal? 6 unit Apartment ($450-500/month)

[Shaun Palmer]

I am currently investigating a deal and wanted to get some feedback from some of the investors on BP.  This is my first time requesting feedback for a deal for a potential opportunity so go easy!  So here goes.   

Sale Metrics:

• 6 unit Apartment Building
• C Class 
• Purchase = $180k
• 1979 construction (all brick)
• I just started looking at this deal so I am not sure of the tenant occupancy at the moment.

My Assumptions:

• Unit Monthly Rent = $480 each - current rent ($2880 at full occupancy)

• $10k in initial renovation costs
• 20% down and finance remainder of principal
• Expenses = $821/month (all units)
  
  • (-) Cleaning/Maintenance/Repair (8% of Rent) $2,765 (-) Insurance (0.5% of Purchase Price) $900 (-) RE Taxes (1% of Purchase Price) $1,008 (-) Property Manager (10% gross rent) $3,456 (-) Capex (5% gross rent) $1,728

  My Outputs:

•  Actual Deal Monthly Income: $2,880 
•  Monthly Expenses: $(1,780.98) 
•  Monthly Cash Flow: $1,099 
• Purchase Cap Rate: 12% 
• NOI: (Annual) $21,939
• Total Cash Needed: $53,480 (20% down & remainder financed)
• Cash on Cash Return / ROI 24.7%

So this is what I have come up with.  So far, the deal looks good to me but please let me know your thoughts about what I might be missing or if you have any general thoughts.  Any positive and constructive feedback is greatly appreciated. Thanks