Feedback on my first analysis

[Account Closed]

Will try to give all relevant details here, let me know if I miss anything

8 unit apartment building in Western, NY. 6x 1bd 1ba, 2x studio, 265k purchase price

Max total rents - 55,800/year 

Max Current rents 42,000/year (2 vacancies right now)

---

Rents w/ 87% vacancy (on average 1 apartment always vacant) - 48,900

Trash - 700/yr

Gas/Electric - 480 / yr

Insurance - 1083/yr

Water - 1040/yr

Taxes - 7650 / yr

Management - 4128/yr

Maintenance - ?? (Not on listing) Using 50% rule, I used 9,373/yr as an estimate

Mortgage P&I - 14,400 (not sure how to estimate, I guessed with 25% down, at 6% for 30 years)

Cash Flow after expenses and Mortgage - $10,050

I feel like this looks like a good deal and that I am missing something here. Thoughts? 

[Justin R.]

Just a few things I noticed without breaking out calculator.

1. This will be a commercial loan. Most likely your looking at rates in the mid 6's. Amortized over a shorter period of time than 30 years, with a limited term (less than 30)

2. Your management will be higher than 4100 a year, especially if you have leasing fees

3. Insurance will be greater than 1k. Call and get quotes

4. The only way gas/elect will be 480 is if all utilities are split.

5. I would educate yourself on how to do an analyses, and create a P/L statement. Your running your numbers very aggressively, and using too much time with precise (yet incorrect) numbers. If you think something is going to cost 480 dollars a year, round up to 500 or a thousand.