Show Me Where I'm Wrong

[Matthew W.]

Please check my numbers below and let me know if I'm looking at this correctly or if I'm completely off. 

The numbers below are for a small commercial multifamily in the Chicago area (5 units). The current numbers are correct. The "market" numbers are an assumption I'm making by finding current available units on the market in the same area (and I'm being somewhat conservative with these numbers).

What I'm trying to figure out here is whether or not I'm calculating the valuation properly given the income, expenses, and cap rate.

Area Cap Rate for small multifamily: 7.3%
Monthly Gross Rent: $5,390.00 (below market rents)
Monthly Expenses: $3,803.40 (taxes, insurance, shared utilities, 5% vacancy, 5% CapEx, 11% property management)
Monthly NOI: $1,586.60
Annual NOI: $19,039.20
NOI / 7.3% Cap Rate: $260,810.96

Assuming the rents were elevated to market rate, the calculation would be:
Monthly Gross Rent: $6,775.00
Monthly Expenses: $4,025.00 (taxes, insurance, shared utilities, 5% vacancy, 5% CapEx, 11% property management)
Monthly NOI: $2,750
Annual NOI: $33,000
NOI / 7.3% Cap Rate: $452,054.79

Below, I'm trying to figure out how to "value" the property at based on the income, assuming a 25 year, 8%APR DSCR loan for 75% of the purchase price that requires 1.25x coverage. Used Google Sheets and the PMT function to calculate the below assumptions:

Monthly NOI: $1,586.60
Divided by 1.25: $1,269.28 payment
Loan Value: $164,453.66
Downpayment: $54,817.89
Price: $219,271.54

I know the owner of this property and doubt they'll sell it for less than $600,000, so it's not going to happen. This is all just me trying to make sure I'm doing the math correctly on analyzing it as an investment.

Please let me know where I'm wrong on these calculations.

[Chris Seveney]

That is not a deal. Expenses are outrageous which appear to be from taxes and insurance being around $2700? You want your expenses to be 30-40% of gross rent. So your numbers are not correct, its just this is not close to being even an asset.

Throw in that this is crook county and that is just another mess you will get involved in