Check my numbers..

[Carl Schmitt]

I've run the numbers several times, changing different sections to see how it would affect the deal. I just want to get everyone's input on it. If it were you, would you buy it?
So here's the details.
6 unit building in a blue collar area. The street it's on, I would say, divides a not so nice part of town from the best side of town. All 2 bed, 1 bath apartments. Each unit will rent for 650 a month, tenant pays all utilities.
Purchase price = 180,000.
Gross monthly- 3900, 46,800/yr
Taxes= 4263/yr
Insurance~ 1500/yr
I figured 15% for PM so 7020/yr
Another 5% vacancy = 2340
10% maintenance= 4680
NOI= 26,991
Putting 20% down, the balance over 20 years at 6.5% is 1073.63/ month. Using these numbers, I came up with 1169 a month and 14031 a year cash flow, after mortgage. Any numbers you see wrong, please correct. What is your opinion on this deal?

[Joel Owens]

You said it will rent for 650 a month.

Is this 6 unit vacant? If so you don't pay for potential.

If they are occupied how long have the tenants been there and what is the pay history and the collection costs??

Any immediate repairs (capex) to the property?? So if you can document that 6 units are rented and have been performing for a long period of time then you count the income.

650 X6 = 3,900 X 12 = 46,800 gross income.
If tenants pay all utilities meaning the trash, water and sewer, gas , and electric, etc. then use 50%

46,800 divided by 2 = 23,400 so at a 10 cap would be 234,000 sales price. Now if these properties have deferred work or are vacant I evaluate totally differently than this formula. The reason is there will be rehab and extra time and energy for the return spent and also no income coming in.

Even if you go 60% costs the numbers still work at the purchase price. The taxes sound really low for the 6 unit as my father in law lives in Mass. and has a small house there and pays over 5,000 in taxes.

Make sure there is not a big rise in taxes or special assessments fixing to hit.