All Forum Posts by: 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!

I have not been good at 1 deal per day. But I'm trying to simplify this one cause its bigger and bigger seems to be more fun for me to look at. 

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!

Thanks for the feedback!  Seemed like a bad deal, but I'm just starting to learn to analyze so I appreciate the help!

This deal is a 4plex in St. Paul MN from Realtor.com. All units are 2 bed, 1 bath. Asking Price is 875,000. The plan would be owner occupancy, 3.5% down for an FHA Loan.

Looking at this chart from my excel sheet it looks to be a bad investment, Even bringing the purchase price down by over 100K still brings me negative cashflow over the first 2 years due to the rehab budget.  

I'm having trouble determining how much the expenses will be per unit per year. If you have any tips I'd love to hear them. I also wrote in 3 units rather than 4 because since I would occupy one i wouldn't be getting rent from myself. Also because I only put 3 rooms the expenses per unit would actually be higher making this deal even worse for me. 

If anyone notices any problems with my calculations or any suggestions for analyzing deals please share!

Looking forward to learning a ton and meeting all of you!