Multi-Property Investment Opportunity

[Trevor Miller]

My wife and I just sold our rental property of 6 years and I now have $80k of capital coming in. I've been scouring the area for the last few months focusing on multi-family homes and just found what I belive to be a great opportunity.  The listing is for three separate properties all on the same block.  One Duplex and two Single Family homes.  All four units are fully rented and according to the add, great-standing long term tenants.  The Duplex has been completely redone w/ new roof, furnace, electrical, plumbing, hardwood floors, bathroom remodel.  One of the two single families has been completely redone.  The other single family was redone in 2015.

I'm new to BP but have been diving right in. Below are my calculated CAP rates and cashflow projections:

Duplex:

PURCHASE PRICE $130,000
CLOSING COST $1,950
CASH TO CLOSE $32,988
LOAN AMOUNT $98,963

MONTHLY RENT $2,100

EXPENSES:
MORTGAGE $582
INSURANCE $105
PROP TAX $147
PROP MANAGER (10%) $210
VACANCY (10%) $210
REPAIRS (5%) $105
MAINTENANCE $50
CITY CERTIFY $84
TOTAL EXPENSE $1,493

CASH FLOW $607

CAP RATE 10.98%

Single Family 1

PURCHASE PRICE $90,000
CLOSING COST $1,350
CASH TO CLOSE $22,838
LOAN AMOUNT $68,513

MONTHLY RENT $1,250

EXPENSES:
MORTGAGE $405
INSURANCE $65
PROP TAX $112
PROP MANAGER (10%) $125
VACANCY (10%) $125
REPAIRS (5%) $63
CITY CERTIFY $42
TOTAL EXPENSE $937

CASH FLOW $314

CAP RATE 9.58%

Single Family 2

PURCHASE PRICE $65,000
CLOSING COST $975
CASH TO CLOSE $16,494
LOAN AMOUNT $49,481

MONTHLY RENT $1,250

EXPENSES:
MORTGAGE $291
INSURANCE $65
PROP TAX $108
PROP MANAGER (10%) $125
VACANCY (10%) $125
REPAIRS (5%) $63
CITY CERTIFY $42
TOTAL EXPENSE $819

CASH FLOW $432

CAP RATE 13.34%

It appears all my CAP rates look great and this is a solid investment but I'd like to hear from seasoned veterens.

Thank you,

[David Marasow]

as others have mentioned if buying under 5-6 units, value based on sales comps only, do not go the cap rate as you may never be able to sell it later....