Looking for some advice on my first potential Multi family. Enclosed is an analysis. Any help you guys might be only give me would be much appreciated!
Hey @Joby Houck , looks like an okay deal. Personally for multi-family deals I prefer closer to $200/door cash flow but that's me. It looks like you've accounted for all the major expenses and they all seem within average deal parameters I would use. Depending on the condition of the property I might lower CapEx to 5% and raise Repairs/Maint. to 10%, but that's kind of splitting hairs. Looks like you've got a sweetheart of a loan, is this going to be seller financed? If not, where did you find a 5.2% loan? Also what's your term? With the market where it is what's your term? Anything shorter than 5 years would be concerning.
Last observation, from a BRRRR perspective the difference between your purchase price and ARV is thin. If you're plan is to buy and hold and you don't have a problem leaving $60k+ in the deal then awesome, but if you're goal is to BRRRR then you need to either buy lower or find a way to make the ARV higher, forced appreciation.
Hope that helps...
Great advice Charles. I just guessed on the value after cleaning it up. Don’t have a lot of experience and having a hard time trying to figure out what it would be in terms of value after I purchase and invest little money in it. Thoughts?
@Joby Houck The value of a deal really depends on your goal and your business plan.
If your goal is to sell (or refinance) it in xxx number of years at yyy price, then you need a business plan on how you will increase income and lower expenses ( grow NOI to justify the exit/refinance price).
If your goal is to get cashflow every month, then you also need a business plan on how you plan to deal with tenant acquisition/retention and day to day management to keep the cashflow you intend to get.
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