DID I ANALYZE THIS RIGHT for CRE Multi Family?
Hello BP family, hope all is well with you and y'all families with this self-quarantine? I'm still learning how to analyze deals for CRE multi- families units. Wanted to see if I analyzed this deal right? I live in So Cal too.. This is a lot of information I'm about to type, but I got time today..(LOL) I analyze deals everyday, so I can get use to it.
I'm doing the income approach?
Number: Offering price 2.5M, 12 Units 100% occupied Price Per unit is 208,333
Mortgage info: 2.5M X 25% Down Payment= $624,932
loan info: $1,875,068 loan amount X 4.5% interest rate =$84,378 Annual Mortgage (Interest Only) 30yr Amortization?
Acquisition cost $624,923 down payment + $75,000 Closing Cost +$25,000 Acquisition Fee 1% Fee + Rehab?= $724,932
Total Acquisition is $724,932 ( I don't know my rehab costs or Cap Ex issues)?
Yearly mortgage break down: $84,378/12 Months = $7,031 Monthly
Total Gross Income: $230,256+23,496=$253,752-10% Vacancy= $228,377
Expenses are $44,204 New Taxes are $50,000 = $94,204 Total Annual Op EX...
Total Gross Income $228,377-Yearly Expenses $94,204= NOI $134,173
Total Annual income: $228,377-Total Annual Expense $94,204 - Total Annual Debt Service $84.377= Cash flow $49,622
cap rate= 5.3% NOI 134,173/selling price 2.5 M=5.3%
Cash on Cash= 6.8% Cashflow $49,627/Acquisition cost $724,932= 6.8%
DCR=1.59% NOI 134,173/ Annual Debt Service $84,378= 1.59%..
HOPEFULLY I DID THIS RIGHT?!?!?!?
I'm learning from RE-mentors from David Lindahl. I paid $1,500 bucks to attend a three days seminar over the summer of 2019, but they wanted 40,000 grand to team up with a sponsor and learn from someone in the business already ( I don't have 40 Grand laying around, just yet). The numbers RE-mentors wanted us to focus on are Cap rate of 8%, Cash On Cash of 12% or higher and a DCR of 1.6 minimum. I learned a lot from the seminar and I been learning it on my own ever since than... At a meetup, someone told me about bigger pockets and haven't stop listening to they old podcasts in my car, and home.. This is my three post...