Newbie....practicing analyzing your insight/advice please

[Mellisa A Lantaya]

Hi - My name is Mellisa and I'm very interested buy & hold multi-family units. I currently have one rental unit that used to be my primary residence, so I'm just now getting involved in what I've always dreamed of doing....better late than never I guess. :/

I've been reading forums for a few weeks now - and upgraded recently to the PRO so I can practice analyzing various deals.   As I said I'm very new - so please feel free to add your tips and correct any unrealistic assumptions you might see :)  I'm trying to learn all I can before I jump into something ...here's what I'm looking at - 

Fourplex in great condition - each unit has 2 beds/1.5 bath and full basements.  Town outside of Pittsburgh.

Purchase price $199,000

After repair value - I'm not sure how to really estimate this without getting a real estate agent involved and I don't want to waste anyone's time while I'm practicing so I assumed $200,000 (based on online searches of surrounding area -  is there a better way?) - since the units are in good shape I've estimated $10,000 for some cosmetic upgrades.

3% down at 6% for 30 years assuming full asking price.

Each unit rents $750 = $3,000 month or  $36000 annual

Tenant pays all utilities. Property taxes are approx $2800 (based on PA tax online) and about $166 for MIP.

I'm assuming 5% for vacancy, repairs, capX & management fee's.

I'm also assuming 2% annual income growth, PV growth, etc. 

Based on all the above the buy & hold analysis indicated $836.35 monthly cash flow and that's a 45.68% cash on cash ROI - that sounds a little high for this property? Am I missing something?

Thanks for your time. 

[Ben Leybovich]

The reason your CCR seems high is because you are using 3% down. There are FHA and conventional programs for owner occupants which can accommodate this, but on an investment property you are likely looking at 25% down, and points.

This is assuming all the rest of your numbers are good :)

Good luck!