Next I'd find out how much I'd need to pay for the following items: Taxes Sewer and Water Trash Heat/Utilities HOA Cap Ex and Ops (how much are you going to save each month for everything from changing community light bulbs to replacing roofs) Insurance Mgmt Fee (as a %) Vacancy (as a %) If all of the above plus your mortgage payment (principle and interest) left me with $100/door/month profit AND 15% ROI (cash on cash) I'd start the negotiation process.

I'd jump your repair and Cap Ex expenses to $75 each.

It will cost me an extra $3500 to purchase windows that are brown, with grids, and with brown capping.

Maybe I am doing something wrong, so I am looking for help.Here is an example propertyBased on my calculations8 units x $580/mo x 40% (water/gas LL paid) x 12 months x 10 CAP = $222,720 purchase priceUsing that formula, my purchase price is never close to the asking price.

I was expecting it to be simple patch work but it requires either capping stairs or replacing them fully which is a bit more than I was budgeting for.I need the permits before I'm willing to close so I'm not stuck with a bunch of other unexpected cost to obtain occupancy permits and paying for repairs before closing is a bad idea based on previous posts and everyone else I spoken to.

If so figure about 12,000 a unit because you will have exterior repairs as well.24,000 plus 48,000 is 72,000 all in.Take 4 doors at 400 a door. 1,600 X 12 = 19,200 gross expected income.If landlord pays utility 19,200 X .40 (60% costs) = 7,680 NOI10 cap you are looking at 76,800 resale price.

Also what price point of property, cap rate expectations, neighborhood ratings are you interested.

If the management manages several in the complex you may get cheaper.I would shoot for a cap rate of 7.33 given your cost of money of 4.33%.Hope this helps.Bill

I've found a deal I like on a condo but there is a rental cap.

If your cost of debt is 5% I want an 8 cap.