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Updated over 7 years ago on . Most recent reply

User Stats

35
Posts
2
Votes
Jackson H.
  • New to Real Estate
  • Miami, FL
2
Votes |
35
Posts

NEED HELP TO ANALYSIS THIS DEAL.

Jackson H.
  • New to Real Estate
  • Miami, FL
Posted

HI! guys. can you guys let me know if this a good deal or not. I'm in the learning process how to read all this number so I'm trying not to make the wrong decision here. This a 16 unit apartment . Any input will help.

THANKS 

Graphs

Income Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30
Gross Rent $96,312 $99,201 $102,177 $108,400 $125,665 $168,884 $226,966
Vacancy Loss -$4,816 -$4,960 -$5,109 -$5,420 -$6,283 -$8,444 -$11,348
Laundry $0 $0 $0 $0 $0 $0 $0
Operating Income $91,496 $94,241 $97,069 $102,980 $119,382 $160,439 $215,617
Expenses Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30
Insurance -$3,877 -$3,955 -$4,034 -$4,197 -$4,633 -$5,648 -$6,885
Management Fees -$7,320 -$7,539 -$7,765 -$8,238 -$9,551 -$12,835 -$17,249
Taxes -$4,771 -$4,866 -$4,964 -$5,164 -$5,702 -$6,950 -$8,473
Misc. -$6,408 -$6,536 -$6,667 -$6,936 -$7,658 -$9,335 -$11,380
Operating Expenses -$22,376 -$22,896 -$23,430 -$24,535 -$27,544 -$34,769 -$43,986
Income Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30
Net Operating Income $69,121 $71,345 $73,639 $78,445 $91,838 $125,671 $171,631
- Improvements -$0 -$0 -$0 -$0 -$0 -$0 -$0
= Cash Flow $69,121 $71,345 $73,639 $78,445 $91,838 $125,671 $171,631
Cap Rate (Purchase Price) 8.7% 8.9% 9.2% 9.8% 11.5% 15.7% 21.5%
Cap Rate (Market Value) 8.2% 8.0% 7.8% 7.5% 6.7% 5.4% 4.3%
Cash on Cash Return 8.5% 8.8% 9.0% 9.6% 11.3% 15.4% 21.1%
Return on Equity 8.2% 8.0% 7.8% 7.5% 6.7% 5.4% 4.3%
Loan Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30
Market Value $842,945 $889,307 $938,219 $1,044,261 $1,364,807 $2,331,288 $3,982,177
- Loan Balance -$0 -$0 -$0 -$0 -$0 -$0 -$0
= Equity $842,945 $889,307 $938,219 $1,044,261 $1,364,807 $2,331,288 $3,982,177
Potential Cash-Out Refi $632,209 $666,980 $703,664 $783,196 $1,023,606 $1,748,466 $2,986,633
Sale Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30
Equity $842,945 $889,307 $938,219 $1,044,261 $1,364,807 $2,331,288 $3,982,177
- Selling Costs -$50,577 -$53,358 -$56,293 -$62,656 -$81,888 -$139,877 -$238,931
= Proceeds After Sale $792,368 $835,949 $881,926 $981,605 $1,282,919 $2,191,411 $3,743,246
+ Cumulative Cash Flow $69,121 $140,466 $214,104 $368,553 $800,132 $1,896,038 $3,393,948
- Initial Cash Invested -$814,980 -$814,980 -$814,980 -$814,980 -$814,980 -$814,980 -$814,980
= Net Profit $46,509 $161,434 $281,050 $535,179 $1,268,071 $3,272,469 $6,322,214
Internal Rate of Return 5.7% 9.8% 11.2% 12.2% 12.7% 12.6% 12.3%
Return on Investment 6% 20% 34% 66% 156% 402% 776%

Buy and Hold Projection


Purchase Info
Purchase Price $799,000
+ Buying Costs $15,980
+ Initial Improvements $0
= Initial Cash Invested $814,980
Square Feet 9,248
Cost per Square Foot $86
Monthly Rent per Square Foot $0.87
Income Monthly Annual
Gross Rent $8,026 $96,312
Vacancy Loss -$401 -$4,816
Laundry $0 $0
Operating Income $7,625 $91,496

Expenses (% of Income) Monthly Annual
Insurance (4%) -$323 -$3,877
Management Fees (8%) -$610 -$7,320
Taxes (5%) -$398 -$4,771
Misc. (7%) -$534 -$6,408
Operating Expenses (24%) -$1,865 -$22,376
Financial Metrics (Year 1)
Annual Gross Rent Multiplier 8.3
Operating Expense Ratio 24.5%
Cap Rate (Purchase Price) 8.7%
Cash on Cash Return 8.5%
Net Performance Monthly Annual
Net Operating Income $5,760 $69,121
- Year 1 Improvements -$0 -$0
= Cash Flow $5,760 $69,121

Assumptions
Appreciation Rate 5.5%
Vacancy Rate 5.0%
Income Inflation Rate 3.0%
Expense Inflation Rate 2.0%
LTV for Refinance 75.0%
Selling Costs $47,940

Purchase Analysis

Purchase Info
Square Feet 9,248
Purchase Price $799,000
Initial Cash Invested $814,980
Income Analysis Monthly Annual
Net Operating Income $5,760 $69,121
Cash Flow $5,760 $69,121
Financial Metrics
Cap Rate (Purchase Price) 8.7%
Cash on Cash Return (Year 1) 8.5%
Internal Rate of Return (Year 10) 12.7%
Sale Price (Year 10) $1,364,807

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