[Calc Review] Help me analyze this deal - Multifamily by College

[Aaron Ehrlich]

View report

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

[Jaysen Medhurst]

@Aaron Ehrlich, this one could have legs.

• Always plan a budget for initial repairs. There will be something.
• Your CapEx and Repairs are probably fine when taken together. Practically speaking the CapEx will probably be higher and Repairs lower. As long as you're putting it aside as reserves, you should be fine.
• Water/sewer looks low. I'd assume $30-40/unit/month until you can confirm with the local water department.
• What does the $150/month electric bill cover? If it's just a few hallway lights, you should be able to drive that down.
• How is heat and HW covered? These old houses are often on 1 system and the owner pays. Make double sure you confirm this. 
• Lawn care and snow removal?
• You're missing Management (10%). Include this even if you plan to self-manage in the beginning.
• Since this is 5 units, it is considered Commercial. I doubt you'll get loan terms that good. Call around to all your local banks and credit unions to see what they offer. I would expect rates mid-4s to mid-5s, term of 20 or 25 years, and you may have to put down 25%.
• What about the 2 garage spaces? Are those included in the rent? Could they be rented out separately?
• What's the local cap rate? How does this property compare?