[Calc Review] Help me analyze this deal

[Meshael Eady]

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

Hi,

I started a mail campaign a few weeks ago and the phone is ringing daily :-). Below is a 7 unit apartment building in Williamsburg Brooklyn (orthodox community). I need help figuring out the expenses to i can come up with an offer. Outside of vacancy,repairs, capEx and property management i don't have a clue and just entered a round figure to complete the report (blasphemous i know) to get it here so i can get some help...PS: This is urgent because this property lies in the hottest neighborhood in the hottest market so i have to act fast. Thanks!

[Alaska Wagoner]

Hi Meshael,

Sounds like an exciting prospect! Do you own any rental properties currently?  My first thought is that a 7 unit complex might be a big first thing to try and bite off.  It will also require a commercial loan, which has different rules.  Here are the numbers I typically use when running my numbers:

Vacancy: 5%

Repairs: 10% (sometimes a little higher if the building is old, like before 1950)

Capex: 10%

Property management: 10%

Can you find out the rents the tenants are currently paying?  If not, look at the pictures and then compare them to SIMILAR LOOKING properties on craigslist in that zip code and check Rentometer.

Did you estimate taxes?  Exact taxes can be looked up on the accessor's website in your county. 

The ARV I have no idea since I'm not familiar with the area; A local realtor would be able to give you a better idea.

Have you talked to a lender about the requirements for a commercial loan?  

I always like to go back to my goals and my buying parameters.  I think that there a lot of good deals, but only certain deals are going to be good deals FOR YOU.  I would tweak your numbers a bit (higher budgets for repairs and capex), get more specific numbers where possible, and define what you are looking to get out of a deal.  Then go for it!

And way to go on the mailings, love that you're out there doing it!