Investing in my First Multi Family Property
Orlando, FL · Member since 2022 · 29 posts · 17 votes
I've been throwing around the idea of investing in a multi-family property for a few years now, and I've been running the numbers on multiple properties. I've singled down on one that I think I would like to purchase but I wanted to get an idea from the greater audience on whether I missed anything. I put what I assumed were conservative numbers, but I believe the last rent ask was $575, but it rented the previous unit at $475
This is my first time trying to buy a MFP, much less in an out of state market, so I would love some eyes on it to see if my numbers are unrealistic.
| Monthly Operating Income | 2931 E 112th St |
| # of Units | 3 |
| Average Monthly Rent per Unit | 475.00 |
| Total Rental Income | 1,425.00 |
| % Vacancy and Credit Losses | 8.30% |
| Total Vacancy Loss | 118.28 |
| Other Monthly Income (laundry, vending, parking, etc.) | - |
| Gross Monthly Operating Income | 1,306.73 |
| Monthly Operating Expenses | |
| Property Management Fees | $142.50 |
| Repairs and Maintenance | 142.50 |
| Real Estate Taxes | 75.00 |
| Rental Property Insurance | 94.00 |
| Homeowners/Property Association Fees | |
| Replacement Reserve | 130.00 |
| Utilities | 50.00 |
| - Water and Sewer | |
| - Gas and Electricity | |
| - Garbage | |
| - Cable, Phone, Internet | |
| Pest Control | 50.00 |
| Accounting and Legal | |
| Advertising | |
| Monthly Operating Expenses | 684.00 |
| Net Operating Income (NOI) | |
| Total Annual Operating Income | 15,680.70 |
| Total Annual Operating Expense | 8,208.00 |
| Annual Net Operating Income | 7,472.70 |
| Capitalization Rate and Valuation | |
| Desired Capitalization Rate | 7.50% |
| Property Valuation (Offer Price) | 99,636.00 |
| Actual Purchase Price | 90,000.00 |
| Actual Capitalization Rate | 8.30% |
| Loan Information | |
| Down Payment | 25,000.00 |
| Loan Amount | 65,000.00 |
| Acquisition Costs and Loan Fees | 2,500.00 |
| Length of Mortgage (years) | 30 |
| Annual Interest Rate | 6.000% |
| Initial Investment | 27,500.00 |
| Monthly Mortgage Payment (PI) | 389.71 |
| Annual Interest | 3,878.29 |
| Annual Principal | 798.21 |
| Total Annual Debt Service | 4,676.49 |
| Cash Flow and ROI | |
| Total Monthly Cash Flow (before taxes) | 233.02 |
| Total Annual Cash Flow (before taxes) | 2,796.21 |
| Cash on Cash Return (ROI) | 10.17% |
