[Calc Review] Help me analyze this deal

[Eli Kalen]

Hello Everyone I'm looking at a deal with a cash flow focus. I keep thinking that I have been taking to much out for expenses.

What is everyone's thoughts on using the 50% RULE????

Thank for the time,

E 

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[Andrew Kerr]

Hi @Eli Kalen - while I am a big fan of the BP calculators, I don't like using them for a project of that size. I really think you should use a more robust modeling tool for a 37 unit. 

While you want to research your own expenses, have you asked the seller for T12, and past 2 or 3 years of actual financials? Is that what you are using for your numbers?

Your closing costs are also going to be a lot more than $5,200 on a deal that size. If you go with fannie or freddie multi family product, a lot of the time the lender deposits can run you $10k or more.

You can negotiate a lot lower than 10% management on a deal that size. 

I don't know that area, but $24,000 a year for insurance seems really high. I was working on a 32 unit in North Carolina, about a similar price point, and our insurance quote was around $8k a year. 

While you vacancy might be close to zero, I like you estimated 10%.

The water and electricity seems high, it might be right because of the laundry.

Anyways, those are my quick thoughts.