Looking to confirm my analysis

[Joe P.]

Hi all -- looking at a 4-unit property in Glenolden PA. I think its priced too high, so my numbers below work at the price I wish to offer. Let me know your thoughts:

Purchase Price:  $250,000

25% Down Payment

Units - Four (4) total:  4 bdrm, 2 bdrm, 1 bdrm, 1 bdrm

TOTAL MONTHLY INCOME $3500

Mortgage Payment: $1021 month

Insurance:  $130 per month

Taxes:  $408 per month

Heating/Utilities:  $218 per month, water and heat. Higher in the winter but averaging this cost out.

Property Management (10%):  $350 per month

CAPEX (10%): $350 per month

Vacancy (8%):  $280 per month

Maintenance (8%): $280 per month

TOTAL EXPENDITURES:  $3,039 per month

Final Numbers:
Cash Flow:  $461 per month

COCR: 7.41%

Cap Rate:  16.80

Curious to know your thoughts -- isn't the best deal in the world, but I haven't seen much better out there. Neighborhood is C+/B-.

[Thomas S.]

You also need to take into consideration the amount of your cash flow that you are buying with your own cash (DP). Based on your DB this property does not have sufficient cash flow. You can do better.