HI! guys. can you guys let me know if this a good deal or not. I'm in the learning process how to read all this number so I'm trying not to make the wrong decision here. This a 16 unit apartment . Any input will help.
THANKS
Graphs
| Income | Year 1 | Year 2 | Year 3 | Year 5 | Year 10 | Year 20 | Year 30 |
| Gross Rent | $96,312 | $99,201 | $102,177 | $108,400 | $125,665 | $168,884 | $226,966 |
| Vacancy Loss | -$4,816 | -$4,960 | -$5,109 | -$5,420 | -$6,283 | -$8,444 | -$11,348 |
| Laundry | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Operating Income | $91,496 | $94,241 | $97,069 | $102,980 | $119,382 | $160,439 | $215,617 |
| Expenses | Year 1 | Year 2 | Year 3 | Year 5 | Year 10 | Year 20 | Year 30 |
| Insurance | -$3,877 | -$3,955 | -$4,034 | -$4,197 | -$4,633 | -$5,648 | -$6,885 |
| Management Fees | -$7,320 | -$7,539 | -$7,765 | -$8,238 | -$9,551 | -$12,835 | -$17,249 |
| Taxes | -$4,771 | -$4,866 | -$4,964 | -$5,164 | -$5,702 | -$6,950 | -$8,473 |
| Misc. | -$6,408 | -$6,536 | -$6,667 | -$6,936 | -$7,658 | -$9,335 | -$11,380 |
| Operating Expenses | -$22,376 | -$22,896 | -$23,430 | -$24,535 | -$27,544 | -$34,769 | -$43,986 |
| Income Analysis | Year 1 | Year 2 | Year 3 | Year 5 | Year 10 | Year 20 | Year 30 |
| Net Operating Income | $69,121 | $71,345 | $73,639 | $78,445 | $91,838 | $125,671 | $171,631 |
| - Improvements | -$0 | -$0 | -$0 | -$0 | -$0 | -$0 | -$0 |
| = Cash Flow | $69,121 | $71,345 | $73,639 | $78,445 | $91,838 | $125,671 | $171,631 |
| Cap Rate (Purchase Price) | 8.7% | 8.9% | 9.2% | 9.8% | 11.5% | 15.7% | 21.5% |
| Cap Rate (Market Value) | 8.2% | 8.0% | 7.8% | 7.5% | 6.7% | 5.4% | 4.3% |
| Cash on Cash Return | 8.5% | 8.8% | 9.0% | 9.6% | 11.3% | 15.4% | 21.1% |
| Return on Equity | 8.2% | 8.0% | 7.8% | 7.5% | 6.7% | 5.4% | 4.3% |
| Loan Analysis | Year 1 | Year 2 | Year 3 | Year 5 | Year 10 | Year 20 | Year 30 |
| Market Value | $842,945 | $889,307 | $938,219 | $1,044,261 | $1,364,807 | $2,331,288 | $3,982,177 |
| - Loan Balance | -$0 | -$0 | -$0 | -$0 | -$0 | -$0 | -$0 |
| = Equity | $842,945 | $889,307 | $938,219 | $1,044,261 | $1,364,807 | $2,331,288 | $3,982,177 |
| Potential Cash-Out Refi | $632,209 | $666,980 | $703,664 | $783,196 | $1,023,606 | $1,748,466 | $2,986,633 |
| Sale Analysis | Year 1 | Year 2 | Year 3 | Year 5 | Year 10 | Year 20 | Year 30 |
| Equity | $842,945 | $889,307 | $938,219 | $1,044,261 | $1,364,807 | $2,331,288 | $3,982,177 |
| - Selling Costs | -$50,577 | -$53,358 | -$56,293 | -$62,656 | -$81,888 | -$139,877 | -$238,931 |
| = Proceeds After Sale | $792,368 | $835,949 | $881,926 | $981,605 | $1,282,919 | $2,191,411 | $3,743,246 |
| + Cumulative Cash Flow | $69,121 | $140,466 | $214,104 | $368,553 | $800,132 | $1,896,038 | $3,393,948 |
| - Initial Cash Invested | -$814,980 | -$814,980 | -$814,980 | -$814,980 | -$814,980 | -$814,980 | -$814,980 |
| = Net Profit | $46,509 | $161,434 | $281,050 | $535,179 | $1,268,071 | $3,272,469 | $6,322,214 |
| Internal Rate of Return | 5.7% | 9.8% | 11.2% | 12.2% | 12.7% | 12.6% | 12.3% |
| Return on Investment | 6% | 20% | 34% | 66% | 156% | 402% | 776% |
Buy and Hold Projection
| Purchase Info | | | Purchase Price | $799,000 | | + Buying Costs | $15,980 | | + Initial Improvements | $0 | | = Initial Cash Invested | $814,980 | | Square Feet | 9,248 | | Cost per Square Foot | $86 | | Monthly Rent per Square Foot | $0.87 | | | Income | Monthly | Annual | | Gross Rent | $8,026 | $96,312 | | Vacancy Loss | -$401 | -$4,816 | | Laundry | $0 | $0 | | Operating Income | $7,625 | $91,496 | |
| Expenses (% of Income) | Monthly | Annual | | Insurance (4%) | -$323 | -$3,877 | | Management Fees (8%) | -$610 | -$7,320 | | Taxes (5%) | -$398 | -$4,771 | | Misc. (7%) | -$534 | -$6,408 | | Operating Expenses (24%) | -$1,865 | -$22,376 | |
| Financial Metrics (Year 1) | | | Annual Gross Rent Multiplier | 8.3 | | Operating Expense Ratio | 24.5% | | Cap Rate (Purchase Price) | 8.7% | | Cash on Cash Return | 8.5% | |
| Net Performance | Monthly | Annual | | Net Operating Income | $5,760 | $69,121 | | - Year 1 Improvements | -$0 | -$0 | | = Cash Flow | $5,760 | $69,121 | |
| Assumptions | | | Appreciation Rate | 5.5% | | Vacancy Rate | 5.0% | | Income Inflation Rate | 3.0% | | Expense Inflation Rate | 2.0% | | LTV for Refinance | 75.0% | | Selling Costs | $47,940 | |
Purchase Analysis
| Purchase Info |
| Square Feet | 9,248 |
| Purchase Price | $799,000 |
| Initial Cash Invested | $814,980 |
| Income Analysis | Monthly | Annual |
| Net Operating Income | $5,760 | $69,121 |
| Cash Flow | $5,760 | $69,121 |
| Financial Metrics |
| Cap Rate (Purchase Price) | 8.7% |
| Cash on Cash Return (Year 1) | 8.5% |
| Internal Rate of Return (Year 10) | 12.7% |
| Sale Price (Year 10) | $1,364,807 |
