Multi Family Deal Practice #4

[Chukwudi Motanya]

Hi BP, hope everyone is well. Posting another analysis to help myself practice. Please see below for my analysis:

Purchase Price: $399,000

Price Per Unit: $100,000

Occupancy: 100%

Seller Cap Rate: Not listed, but from my calculations I am getting about 7%

21th attempt at crunching multi family numbers. 79 more to go. Cap rate is not given, but from the model I am using, the cap rate ends up being around 7%

Purchase price is 399,000. Cap rate that I calculated is 7.0%. Although from a per unit basis this is a little low for us, and the cap rate for this one is a little on the lower side, this one right now from my assumptions would cash flow. I think the big factor for this one is the fact that it is coming turnkey. I would be interested in seeing the age of the roof, and the AC and HVAC of each unit, but if turnkey and if these are ok, then our major expenses should be taken care of. On $399,000, and assuming that expenses only take up about 39% of Gross income because its turnkey, then we could potentially have a net income of $27,816. Debt Service would be $21,803 and our cash flow would be $6,000 a month roughly

This deal I believe would make sense, but my expense assumptions may be a little on the light side, so I will need to confirm those numbers

Thanks All

Chudi

[Emanuel Papadakis]

You mean 6k/yr and 500/mo. Did you factor in CapEx (even though it's turn key), maintenance (lawn care), property management, utilities etc. I would use the BP rental calculator for obtaining a more accurate analysis.