Puyallup, WA 10 Plex

[Matt J.]

Hello BP

I have a new construction MF deal I'm looking at. I'd like to ask those that are familiar with MF for their feedback on anything I may be overlooking.

Location is in downtown Puyallup, WA. This area is East of Tacoma WA. I'd be purchasing 2 fourplex lots and 1 duplex lot and building a total of 10 units. All three lots are next to each other. Being that these are on their own tax lots and 4 units or less it would allow for traditional financing once the construction is complete. It would also allow me to sell one building at a time should I chose.

Each unit will be individually metered for utilities.

Here are the numbers:

Cost of land and construction, all in, $1,180,000 (verified with experienced MF builder)
Down payment 230k
Loan amount 950k
LTV 75%
Interest rate once buildings are completed, rented and refinanced out of construction loan, 4%

GSI for 10 units $11,850
Monthly expenses
Vacancy 5%, $592.50
CapEx 2%, $237.00 (low due to new construction)
Garbage 5%, $600.00
Management 7%, $829.50 (verified with local prop mgmt co.)
Taxes 8%, 958.33
Repairs 2%, $237.00
Electricity $50
Insurance 3%, $300.00
P&I 38%, $4,535.45
Total $8,339.78
Monthly cashflow $3,510.22 / NOI $96,548.00
Cap Rate 8.18%

What am I missing? Anything else I should be taking into consideration?

Thank you