Help anaylize this deal..

[Ken Williams]

I am looking into a 25 apartment unit. Here are the #s:

List Purchase price- $745,000
Down payment- $90,000

Gross Rent (with 5% less vacancy)- $171,420
Less Expenses- $82, 930 (46%)
Net Income- $88,490
Mortgage/Debt Service & 7.75%- $61,896
Net Cash Flow After Debt Service- $26,594

What would you offer on this deal to make it work for you??
It is getting close I think.

Thanks in advance

[R Sean]

Ken,

I won't question your assumptions, but 5% vacancy and NO capex seems very aggressive.

If, and a big IF, these are correct, your yield to equity is 28% ($27k / $90k)...which is good...and moreover your initial yield (or "going in" cap rate) is 11% ( $88k / $745k)...which is the sweet spot.

Pursue the deal.