Need help analyzing Rental Property.

[Isar Papaladze]

Hi, I need help analyzing a rental property.

Sale price is $795,000.

building has updated/renovated exterior + interior 3 out of 6 units, has separate meters + coin operated laundry room.

Tenants 5 out of 6 is month to month.

location is very good.

the calculation on the calculator is with zero down, Please take a look at my calculations to see if I am missing anything, my first rental Property calculation.

Tank you!

[Nathan Gesner]

How are you financing this with 0% down? Or is that just a guess?

My thought is that your income and expenses are extremely close. I can't verify your numbers but you estimate $328 cash flow which comes to $55 per unit. Assuming everything is correct, that's not enough. Most people want a minimum of $100 - $200 in cash flow to be a good deal.

Your annual cash flow would be about $3,900 if everything goes right. Does it make sense to take on $800,000 in debt just to earn $4,000 a year? That income can be wiped out by four months of vacancy on one unit. One bad tenant can cause $3,000 - $5,000 in losses with little effort. Three of the units still need to be renovated. The market could take a dip or rentals could be over-built, causing prices to drop or units to sit vacant.

Based on what you've shown us, and assuming you put everything in correctly and completely, I think this is a bad deal because you're operating on thin margins.