Analyzing first deal
This will be my first deal.
A 3 Plex listed at $59,900. I plan to ask for less but I'm basing my #s off of the $59,900.
(They came down $10k over a month ago.)
These are currently occupied to HUD renters.
Rents for each unit:
Unit 1) $513
Unit 2) $450
Unit 3) $400
Total monthly rent= $1363
Annual NOI= $16,356
27.3% CAP rate
I don't plan to use property management on 3 units but for the future I will..
$1363 x .10= $136.30
50% rule:
$1363/2= $681.50
Property management
$681.50- $136.30= $545.20
Estimating Taxes/ Ins/ Mortgage On $59,900
= $383
$545.20- $383= $162.20/ 3 units
= $54.06 cash flow/ units
Is this a good deal? I know the rule of thumb is $200/ unit or the 2% rule. This is only $54.06 cash flow/ unit but a 2.27% rent return on the asking price.
Am I missing something? Have I over analyzed/ under analyzed? What are your thoughts on this deal?
