Please help me analyze my first potential multi

[Mayer M.]

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

Hey All!!!

I am hoping to pickup my first multi family property and need some of your help on the analysis. Basically, my plan is to pay cash and do a cash out refi after three months of ownership for 100% of the money i put into the property resulting in 100% financing and only a few dollars out of pocket.

I have never done a 30 year mortgage before, all current mortgages are 10-20 year. The rents in this report are about $100-150 below market value per unit. The property is in a C+/B- area and i would be getting this with a partner

Any advice would be extremely helpful and greatly appreciated. 

Thanks!

[Curtis Rouse Jr]

@Mayer M. congrats on working towards purchasing your first MFR! So I've built a financial model that I help investors like yourself analyze anything from the smaller SFR to multi million dollar apartment complexes. So according to your purchase price and metrics provided I have come up with the following below. Based on the following purchase price, this wouldn't be a good deal and would negatively cashflow per the assumptions provided below. The last two charts show at what purchase price this deal would make sense at ($160k). I personally invest in apartment complex and this is the reason I leave the smaller deals alone because the economies of scale at only 4 units. I look for 10% COC returns as you can see in the model and per my analysis, you would reach that by lowering your offer.

Assumptions

Downpayment: 20%

Closing Cost: 6%

Amortization: 25 yrs

Int Rate: 5.3%

Occupancy: 90%

Purchase price: $240k

Purchase Price: $160k

* I hope this helps and makes sense. This is a sample and part of the full analysis that I do when preparing executive summaries for raising private money, so if you need more detail than what's provided just let me know. Please let me know if I can be of any additional assistance or if you have another deal I can help you analyze! The BP community has tremendously helped ignite building my portfolio so I love giving back. Best of Luck!