Help analyzing a 5-unit Deal
Hi Everyone,
I am looking to do my first commercial deal. I currently own residential multifamily and I want to get into commercial due to the scale you can get and Control Value.
In order for my strategy to work though, I need to be able to secure the correct first deal: Value add 5-Unit under $500k
The goal would be to force appreciation, elevate cap rate, and flip the building to another investor. Profit, 1031 exchange into a larger deal.
The reason for this price is I am shopping on what I can put down for a down-payment WITH a partner.
With that being said, here's the deal:
Purchase Price: $475,000
Cap Rate: 8.3%
Unit Mix
2/1- $900
1/1- $900
1/1- $875
1/1- $850
1/1- $800
Total: $4325/M $51,900/Y
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Maintenance
Insurance: $184.39/M
Electric: $18
Water: $50
Garbage: $160
Taxes: $464.39
Common Areas: $150
Total: $1,026.64/M $12,319.68/Y
Total Units: 5
Total Sq Ft. : 3,000