[Calc Review] Help me analyze this deal

[Brian Kosack]

View report

it seems like this could be a good deal if i play with the numbers a little more.  the main thing that i cannot understand is the monthly expenses.  doesn't seem to add up annually even with the insurance and taxes.  so it is really throwing me off.  this is the first time i have posted a report to the forum.  

*This link comes directly from our calculators, based on information input by the member who posted.

[Adam Weitzel-Leishman]

Hey Brian,

Still in the research phase myself, but I had a few questions;

1) Would you go FHA with this and live in one of the units? If not, your downpayment would have to be around the 20% mark if i'm not mistaken, and your a few thousand off with your numbers.
2) How did you come up with $3500 closing costs for a $500k home? This seems a little on the lower side to me (I could be mistaken)
3) a 6.9 cap and $300+ cash flow for a half million dollar property seems very low to me. If that's your market, I would suggest looking elsewhere in the country. 

That's just my very inexperienced take, not meaning to offend!

Thanks

[Bill F.]

@Brian Kosack You are missing Property Management. Including that @ 10% and your cash flow disappears. 

Depending on the age, CapEx and repairs seem low.

[John Leavelle]

Howdy @Brian Kosack

Are you planning to House Hack this deal?  5% Down payment is not going to work with a commercial property (5 plus units).  That is unless you found a portfolio lender that will do it.  Otherwise you will need to put 25% down.  And you will not be able to use Residential Financing (30 years amortization/sub 5% Interest Rate).  It will be more like 15 to 20 years amortization, 3 to 5 year loan term, and over 5% Interest (possibly a variable rate).

I also agree your expenses are too low and missing some.  PM, Insurance, and any common utilities the owner may be responsible for.  What is the $650 Misc covering?  Seems excessive for that category.