[Calc Review] Help me analyze this deal

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*This link comes directly from our calculators, based on information input by the member who posted.


Hey BP!


I'm looking for feedback on this deal analysis (see link above) for a triplex in Cincinnati. The rent ratio is 1.94% ($1750/$90k) and the neighborhood is C to C-. Owner is responsible for water/sewer/trash and utilities for the 1BR unit. The 2BR and 3BR units pay their own gas and electric. I'm withholding 8% for vacancy, 9% for maintenance, 9% for Capex, and 10% for property management, totaling $630/mo. PITI is another $692/mo, owner paid utilities are $350/mo, leaving the total monthly cash flow at a mere $77/mo. I haven't even accounted for other costs like lawn care and snow removal. Clearly, from the numbers I'm using this would not be worth it. I feel like many people would kill for a property that had a 1.94% rent ratio which begs the question, how are you making money off properties like this? 


I appreciate any and all feedback!

Sorry, not sure why the link is not working. I've c/p'd the gist of the numbers below:

Property Specific Inputs
Offer Price $ 90,000.00
After Repair Value $ 90,000.00
Rehab/Repair Costs $ 5,000.00
Annual Tax $ 2,315.00
Monthly Insurance $ 100.00 
Cash Needed
Acquisition Costs $ 26,720.00  
Holding Costs $ 692.74  
Refinance Costs $ -  
Total Cash Needed $ 27,412.74  
   
   
Rental Income
Gross Rental Income 1.94% $ 1,750.00
Operating Cost Assumptions
Vacancy Rate 8.0% $ 140.00
Maintenance 9.0% $ 157.50
Capital Expenditures 9.0% $ 157.50
Property Management 10.0% $ 175.00
Total 36.0% $ 630.00
Owner Paid Utilities
Electric/Gas ($/month) 8.6% $ 150.00
Water/Sewer ($/month) 11.4% $ 200.00
Trash ($/month) 0.0% $ -
Total 20.0% $ 350.00
   
   
Cash Flow Calculations  
PITI $ 692.74  
NOI $ 770.00  
Monthly Cash Flow $ 77.26
Net Cash for Deal $ (27,412.74)  
Cash on Cash Return 3.38%

I would try to figure out how to get the tenant to pay for the utilities. If the lease on the 1 bedroom specifies the landlord pays I would draw up a new lease once that one is over. If the tenant has an issue with that just find a new tenant and you save $150 per month. If you could get the water sub-metered that would save another $200. I've never done it personally, but even if it were a $4,000 expense after 20 months of not paying for their water you have your money back.

Remove the utility figures from that equation and it looks like you have a pretty good deal.

I would be more sketched out by getting 3 units for 90k. Are you sure it's a "C" neighborhood? Would you leave your car there over the weekend?