Help in analysis of multi-family
Hey Multi-fam BP'ers...
I had a deal that looked pretty good on paper until the seller disclosed they pay for all utilities. That really messed up the plan. The actual numbers are below. So my question is this...how can I create a deal out of a situation like this? The main issue is lending. Since the numbers are so bad, I would have to get a bridge loan and separately meter things, combined with raising rents, which would likely lose half the tenants (fully occupied right now). Struggling to find a deal that's actually a deal. I would love to just jump into syndication but we aren't ready for that from a cash and partner/experience standpoint.
Thought we might have found a niche in smaller apartment buildings, but man...the utilities and trash/pest control are killing this deal. Should I stick with duplexes that are separately metered? Any input appreciated.
| PROPERTY INFO | CASH FLOW | |||
| Number of Units | 12 | Gross Op Income | $63300 | |
| After Repair Value | $320000 | Expenses | $45856 | |
| Purchase Price | $250000 | Net Op Income | $17443 | |
| Rehab Required | $25,000 | Debt Service | $18468 | Monthly Cash Flow |
| Monthly Rent Per Unit | $440 | Annual Cash Flow | -$1025 | -$85 |
| Carrying Costs | $0 | CASH ON CASH ROI | -2.89% | |
| Closing Costs | $7813 | Investor ROI | 10% | |
| Cash needed for deal | $76563 | Arbitrage | -12.89% | |
| Cash left in deal after refi | $35440 | LENDING | ||
| Equity After Rehab | $37188 | Loan Amount | $206250 | |
| DSCR | 0.94 | Bridge Loan Rate | 6.5% | |
| LTV | 75% | Bridge Loan Payment | $1539 | |
| CAP RATE | 5.45% | Bridge Loan Fees | $7813 | |
| INCOME | Months to stability | 0 | ||
| M Rental Income | $5275 | Perm Loan Rate | 6.5% | |
| Other Income | $0 | Perm Loan Payment | ||
| Total | $5275 | Perm Loan Fees | ||
| M EXPENSES | ANNUAL AMOUNTS | VAC RATE | ||
| Taxes | $115 | $1382 | 11.43% | |
| Insurance | $265 | $3174 | ||
| Repairs & Maint (5%) | $264 | $3165 | ||
| Pest Control | $50 | $600 | ||
| Trash | $215 | $2580 | ||
| Accounting | $200 | $2400 | ||
| Vacancy (x vacancy rate) | $603 | $7235 | ||
| Management (8%) | $450 | $5400 | ||
| Electric | $139 | $1672 | ||
| Grounds Maint | $200 | $2400 | ||
| Water | $589 | $7074 | ||
| Gas | $51 | $611 | ||
| Sewer | $385 | $4620 | ||
| 10% investor payment | $295 | $3544 | ||
| Total | $3821 | $45856 |