Multi-Family Property Assitance

[Matt Larimore]

Good morning,

Newbie multi-family investor here and wanted to run a property by BP community. The property is a 10-plex .  Annual gross rent is $81,240, expenses are $23,056 (includes property taxes, 8% maintenance, and 7% property management fees, which leaves a net of $58,184. Purchase price is $500k.  It’s a bit challenging to compare to other properties since there are no other units like this in the area.

Here’s a breakdown of how I calculated a cap rate of 11.6%.

Gross = $81,240

Expenses = 8256 (utilities) + 2600 (property taxes) + 6500 (maintenance at 8%) + 5700 (property mgmt at 7%) = $23,056

Net income = $58,184

Cap rate = $58,184 / $500,000 = 11.6%

Any thoughts or advice on how to proceed or questions to ask?

Thanks