Fist commercial deal - look ok?

[Mark Frattini]

I’m under contract to purchase my first 6 unit commercial deal. I wanted to get the community’s opinion on my analysis. Purchase price: 315000 5.9% CAP B class property 25% down payment 5.25 interest rate 5/5 20 year amortization Expenses Vacancy: 8% Property tax: 7,000/year Insurance: 2,000/year Property management: 12% Maintenance: 5% CapEX: 5% Utilities: 325/month Landscaping: 50/month Loan payment: 1,592/month Income Gross rent: 3,485/month Storage: 200/month I will basically break even using the above projections. Not ideal. The property has a newer roof, no central furnace (baseboard heating), and wall ac units. Units are in good condition with the exception of one which needs a total refresh. CapEX should be low for this property. After taking ownership of the property I plan to slowly increase rents up to a total of 4,050 and bill the tenants back for water. This makes the property a 8.7% CAP. This will increase the cash flow to around 114/door. I will also increase the storage units rents to 250/month. Do my pro forma numbers appear accurate? I’m more familiar with analyzing residential 2-4 unit deals in C class neighborhoods. Thanks for any tips, tricks and suggestions.