Deal Evaluation

[Chris Lance]

Hello all, I'm new to the community and would like some input on a deal I'm considering.  I have a full time job, and have owned and managed two three family buildings in East Boston since 2003, and 2005, so I'm not a novice, but by no means seasoned.

The deal I'm looking at is a 5 unit residential north of Boston. It's in decent rental shape, class B, with an asking of $820K. The Gross income is 81K with room to go up to $96K , and Total Expenses are $27K, including property management, taxes, utilities and reserve for maintenance. My key numbers are as follows CAP Rate 6.81, Cash ROI 7.31 with 20% down, Total ROI 24.7% and DSCR of 130. This seems like a pretty good deal to me, the price is above some comps I've found in the area, but they are few and far between, and I feel that comps for 5+ units arn't that valuable.

I'm thinking about using a heloc on another property for part of the down payment for the commercial loan.

What am I missing, thoughts?

Thanks, and looking forward to your feedback

Chris