5 family analysis help please

3 Replies

Hi everyone. Got a potential property I want to make an offer on, wanted to run it by some collective mind stress testing. 

5 family, 4 1+1, 1 2+1 

Max purchase 190k

Rent 2600/mo (room to raise)

PITI 1225/mo

25% down, 25yr fixed @5.5% 

Closing 3k

Down payment 47500 

Vacancy 8.4% 

Repair 5%

Capex 5%

PM 10%

Landlord utilities 150/mo

DCR 1.56

GRM 6.09

2% rule? =1.33% 

Cash flow net $486

COC ROI 11.2%

Currently fully occupied, c+ neighborhood, only multifamily on the block, room to raise rents to ~2750 easily. So thoughts BP? 

@Donald S.

The math is correct if these numbers are accurate, I used the 2600 rent and got the same 11-12% CoC. Seems like conservative estimates, and nothing I can see thats missing. This is one of the better deals I've seen posted on here in a while, awesome!

@Donald S. Some things to consider:

  • Does it need any immediate work done?
  • Where are the major systems (roof, hvac, electrical) at in their life spans and have you budgeted adequately for replacing them?
  • You say it is fully occupied. Have you been provided with leases and that the tenants are actually paying the rental amounts listed on the lease and are current? Make sure you get tenant estoppels signed to verify this.

thank you @Derek (I still can't tag from my phone), I did do the numbers on the conservative side. 

@Michael I should be getting rent rolls and copies of leases today. I haven't been to the property yet so haven't seen the major system life span yet, except that the roof is from 08 so it should have another 15 or so years left. 

Thank you both of you for double checking me. Hopefully I can get this deal done. 

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