[Calc Review] Help me analyze this deal

7 Replies

@Heyward Lovett , if it's the Seller who arranged those pro forma figures, I recommend taking a much closer look at both income and expenses figures, as well as the purchase costs and loan details.

Firstly, I find it hard to believe that you'd get $18,000.00 monthly gross out of 5 units (only 1 of which has 3 bedrooms). [But, I acknowledge my ignorance of local rentals there].

Secondly, can you get a 30 yr fixed loan at just 4% for commercial property?

Thirdly, just $3,500 closing costs for a $1.8M property?

I could go on, but, you get the idea, right?  

And don't forget the adage: You (should already) make money the day you buy!

ie.  Be an investor who only buys property for less than what the market would sustain!

Good luck...

@Brent Coombs thanks for the feedback it’s greatly appreciated. I am definitely a newbie looking to gain experience using the calculators to analyze and find great deals. Any advice on how to find the real numbers so that I can go back and edit the document?

Originally posted by @Heyward Lovett :

@Brent Coombs thanks for the feedback it’s greatly appreciated. I am definitely a newbie looking to gain experience using the calculators to analyze and find great deals. Any advice on how to find the real numbers so that I can go back and edit the document?

Now I'm curious about how those numbers were arrived at in the first place? Who provided them?

If you're going to be an Investor, certainly you need to have a good understanding of "how to find the real numbers".  Asking here on BP has been a good start for you.  Hopefully you'll continue to get feedback that will inspire your researching.

My first suggestion to you would be:  Find out from Lender/s how much they'd lend you in such circumstances (ie. $ Amount; Interest Rate and length of loan.  Hint: Aren't 30 yr loans only/mainly for ones primary residence)?

Secondly, you might like to start looking for an Investor-friendly (and objective) RE Agent who is happy to look at potential deals that you come across. One who doesn't hold back from telling you why it won't work in that location; that price, etc.

Also, you could/should join a local REI Club, which usually hold monthly meetings. Cheers...