102 Unit Apartment Complex in San Diego

[Jamison Remmers]

I'm on Crexi.com looking for a multifamily investment property, and I came across this gem. I've been deducting 5% for potential vacancy and 35% for expenses from the NOI displayed on the website. While running my numbers, I'm finding that this eliminates any chance of cash flow from almost every property.

I've messed around with the numbers to see how I can get the cash flow to positive, but I'm curious if I'm doing things correctly. If I raise the down payment to around 50%, the cash flow is positive, but that seems like a rather large down payment. Is this a method people are using to offset the expenses, or is negative cash flow expected until you acquire the property and raise rents to achieve the desired ROI?

Thank you all for your help and advice. I'm debating looking out of state if I can't find a property with positive cash flow locally.

[Kerlous Tadres]

@Jamison Remmers, most Crexi "NOI" numbers are optimistic, and when you add real vacancy/expenses plus today's loan payment, a lot of deals won't cash flow at normal down payments. I'd only take negative/flat cash flow if there's a clear plan to raise rents or cut expenses fast, or you can get better terms like lower price, seller financing, or assumable debt. Otherwise, look at a more affordable market.