Help running multifamily unit numbers

2 Replies

Hello BP family. I am learning more and more on multi family units. I am a rookie at multi family units though and i would like help running numbers on multifamily units. Could someone please help me understand running the numbers on multifamily units? I could use any advice given. Thank you so much. 

Tony Johnson

@Tony Johnson , but, not a rookie with SFR? Your cash flow per door won't be as much, but neither will your purchase price. Cap ex should be a bit less per door. Look into the cost of sub-metering if the utilities aren't already directly paid by Tenants. That sums it up - unless it doesn't.

Would you like to advise us of what your learning has taught you so far? Cheers...

My 2 cents -

1. The smaller the property the less you should depend on percentages and the more you need to count every penny. For example, a 4 unit MF would be impossible to have a 5% vacancy for the year if each unit turned once a year and the turn around time was  one month for each. Your vacancy would be 9.1%.

2. Capex and recurring maintenance cost are not the same. Don't let the idea that replacing carpet and repainting a unit are Capex, you will do it far more often than the IRS definition. you need to budget these cost on an annual basis and set aside reserves so that while you may not actually spend that each year, over the long term they add up.

Ashcroft Capital
A national multifamily investment firm
Three Reasons Investors May Prefer Real Estate
Read three reasons why investing in real estate private placements may provide several advantages.
Read More Here