According to the preliminary numbers, it is at about a 14% CAP.

I look for at least $100/mo after maintenance, cap-ex reserve, turnover, vacancy, management, debt service ect.

Now the cap rate is a less favorable 125,000/2 million = 6.25%."

CAP rate?

But for learning purposes, given that i just learned about cap rates, NOI, IRR, cash on cash etc.

It's a great investment property with a potential cap rate of 11%!

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.