I feel like I may be missing something on this?
I am working with a seller on three 5 plexes that he wants to sell as a package deal. He is not willing to separate them at least not at this time. All units are currently occupied. Here are the numbers:
Asking price - $630,000
Down payment $126,000
Monthly Rent - $7,585 ($91,020 annualized)
Expenses - $1,825 monthly ($21,891 annualized)
NOI - $69,130 Annually
10% Vacancy - $9,102
Debt Service $3,000 monthly ($36,000 annualized)
Cash Flow - $2,002 monthly ($24,027 annualized)
Cash on Cash return - %19
Cap Rate - 9.5% after vacancy deducted from NOI
Average rent $506 over all units
The property has new vinyl siding, new windows, and new roofs in the last 5 years. Five of the 15 units have been renovated. Several units appear to be under rented and they should be able to be increased over time. They also bought out the laundry so they are not splitting the profits for that. It also has land included that may be used for future expansion (i.e. garages). I am not sure how much to account for in maintenance on the property. I feel like I am not accounting for something else that may be very important. Any insight would be greatly appreciated. Thanks in advance for taking the time to provide input.