Need help figuring out Expenses for MFU

[Amit G.]

Good morning BP'ers

I was trying to analyze a 4 unit multi family property off the MLS listed at $199000 with only 4 category of expenses provided by seller - insurance, water/sewer/trash, electric and taxes. I do have the actuals for these too and they match what they provided. Some of the expenses I know that I should consider are Capital expenses@10% as the last roof replacement is unknown (property built in 1980s), Repair expenses@ 5%. Seller did many improvements over last 5 year, Lawn care/ snow removal expenses, around 3%.

So my question is, what all other common expenses am I missing to come up with a realistic NOI compared to what seller provided ($13000)?

[John Leavelle]

Howdy @Amit G.

You are the Buyer. It is your decision as to what is an expense. There are far more expense items than the Seller is listing. They are notorious for excluding things to make the bottom line look good. So include Property Management, Pest control, Lawn care/snow removal, legal, accounting, and anything else you need to feel comfortable with your analysis. They may not include PM because they self manage. Even if you self manage it is wise to include it because you may grow your REI business to the point you need PM services. Besides the next Buyer may include it (like me).

Hope this helps.