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[Jack Amaral]

311 7th St S - Herbshire Apartments

48 Unit Apartment Building Offered at $3,224,327 at a 7% Cap Rate in Waite Park, MN

Found on Loopnet.

https://www.loopnet.com/Listing/311-7th-St-S-Waite-Park-MN/19090256/

Looking at the proforma, Market rents= $384,961.00 (looks like they're based on market rents rather than their current rent roll maybe?)

List price is $3,224,327

2% /1% rule- $384,961.00/$3,224,327= 0.119= 11.9%? Why do i feel like this is wrong? or am i using the wrong numbers?

50% rule- 384,961/2= $192480.5 projected expenses (not including loan)

Lets say 20% down so a loan of 2579461.6 w/ interest rate of 3.92 for 30 years= monthly payment of 12,196

(12196*12)+192480.5= 338832.5 (total annual Expenses including Loan)

Projected Rent-Projected total expenses= annual cashflow/12= Monthly Cashflow

$384,961-$338832.5= $46128.5/12= $3844.04/month.

Let me know your thoughts, comments, suggestions, anything! I'd love to hear some feedback!