Analysis of prospective buildings

[Travis Mills]

Hi,

    I have been reading through the information on BP and have a learned a lot. I have 4 buildings and am in the market for some new ones. I have been buying up to this point largely on whether I can fix up an old beater. I buy with cash, fix and refinance. My numbers certainly don't reflect the 2% 50% rules very well and I would be curious why not. I am not counting roofs, or other major repairs as costs, but should I? Generally I take care of everything so the house needs little maintenance for years to come. Below are 2 of my buildings followed by 2 that are on the market in nearby towns right now:

My building 1 (value of about 350k) : 4  2-bed units

GOI = 52k

costs = 19k

NOI = 33k

mortgage(25 year): 25% down, 14k/year

Cap= 9.4%

CCR = 22%

DSCR = 2.4

BER = 63%

My building 2 (value of about 325k) : 4 2-bed units

GOI = 46k

costs = 17k

NOI = 29k

mortgage(25 year): 25% down, 12k/year

Cap= 9%

CCR = 21%

DSCR = 2.4

BER = 63%

building for sale 1(asking 500k): 4 2-bed units

GOI = 41k

costs = 7k (building is quite new, needs no work)

NOI = 34k

Estimate:: mortgage(25 year): 25% down, 20k/year

Cap= 6.8%

CCR = 9.6%

DSCR = 1.7

BER = 66%

building for sale 2(asking 650k): 4 2-bed units

GOI = 56.4k

costs = 10k (building is quite new, needs no work)

NOI = 46.6k

Estimate:: mortgage(25 year): 25% down, 24k/year

Cap= 7.1%

CCR = 13.6%

DSCR = 1.9

BER = 60%

Both these buildings seem overpriced but for years I've witnessed many such buildings sell at similar prices, so these are market prices. For the second building for sale I actually offered the guy $600k and he refused. If anybody has any feedback I would be very appreciative, I am so happy I found this place.

thanks 

travis