4 Plex Analysis - Assistance/Review

4 Replies

Can anyone take a brief look at this analysis (my own) and let me know if they see any significant issues?  The purchase price is higher than I plugged in by 20k but to me, this is questionable...….my problem is, these props are selling which means SOMEONE thinks they are a deal. 

For the sage investors our there, thanks in advance for your input and advice in advance. 

Income Evaluation No of Units Unit Rate Income      
2 Bedroom Unit A 1                 650.00                                    650.00          
2 Bedroom Unit A 1                 650.00                                    650.00
2 Bedroom Units A 1                 650.00                                    650.00
2 Bedroom Units B 1                 650.00                                    650.00
2 Bedroom Units 1                          -                                               -  
3 Bedroom Units B 0                          -                                               -  
Garage Units 0                          -                                               -                  -  
Storage Units 0                          -                                               -  
Laundry Units 0                          -                                               -  
Comm Units 0                          -                                               -  
Comm Units 0                          -                                               -  
Comm Units 0                          -                                               -  
Total Monthly Income 5                                    2,600.00
Total Annual Gross                              31,200.00
Total Annual Cost / EBIDTA                                9,911.86
Net Cash Flow (Annual)                              21,288.14
Net ROI 42.39%
Monthly Cost of Operation By Landlord By Tenent Monthly Annually
Monthly Taxes x                                       137.50             1,650.00   (From Historical Data)
Montly Space Rent (MHP)                                                -                            -   N/A
Monthly Insurance x                                       100.00             1,200.00 Calc'd
Monthly HOA                                                -                            -   Posted
Monthly Water/Sewer   X                                       320.00             3,840.00 Estimated
Monthly Garbage X                                       160.00             1,920.00 Estimated
Monthly Electrical X                                                -                            -   Tennant
Monthly Heat/Gaas   X                                                -                            -   Tennant
Monthly Other Utes x                                                -                            -   N/A
Monthly Yard Maint x                                         20.00                 240.00 Estimated
Monthly Maint - Op Ex x                                       260.00             3,120.00 Calc'd - 10%
Cap Ex x                                       260.00             3,120.00 Calc'd - 10%
Monthly Vacancy x                                       182.00             2,184.00 Calc'd - 7%
Screening/Tennant Management x                                         20.00                 240.00 Estimated
Monthly Management x                                                -                            -   At Risk - Self Manage
MONTHLY OP EXP                                   1,459.50
Total Annual Expenses                                 17,514.00
Total annual Debt Service                                   8,452.36
Net Operating Income NOI                                 13,686.00  
Net Income                                       5,233.64
ROI % 10.42% Low/Average
CAP Rate (Net Income/Purchase) 2.92% Extremely Low 
Cash Flow per Door                                       109.03 Very Low  Tax Assessment 
Estimated Expenses - 50% Rule                                       159.50 Conservative
Banked Amount - CAP Ex, Repairs, Vacancy                                   8,424.00

Apologies......BP doesn't let you attach a  file for review and it reformats excel cut and pastes.  

Basically, the info is as follows:

invested - 52k

Gross Inc - 31,200 (at 100%) 

Mortgage - 8,500

Op Ex - 17,500

Net Income -  5,233.00

CAP Rate - 2.92% (market is more like 10-12)

ROI - 10.42% - not good enough

Again, my challenge is I took 10% off list price and it still doesn't look great...…..so.....????  And this is at a self managed rate.  

I used a standard 30 yr 4.8 conventional loan on this. Perhaps my calculation for CAP is wrong. I just checked it an I AM wrong. It should be about 7.5%. I was factoring in debt service.