Newbie Math on a Multi-Family Unit Can you Check this?

4 Replies

The calculators only spit out what you put into them.  The "math" is fine.  The deal, as is, may not be.  Is there a reason in particular you're only putting 5% down?  If you're looking for cash flow, if you put more money down, your monthly payment will go up, and you'll get a better CoCROI.  Also, your vacancy looks a little high.  I normally set that to 5%.  Are you also planning on paying the water bill for your tenants?  Same with garbage?  Those expenses should be on the tenant.  Maybe the rent is too low?  Lots to consider.  Try reworking the numbers with those adjustments and see what you get from there.

Thanks, I'll try editing the numbers. I was just trying to keep it comparable to the are which have similar renting prices. The comps are all around that. I guess since I haven't owned a property I don't know how bad my Vacancy will be, I guess I can let them pay for water and garbage.  5% down because I don't have a lot of Capital i'm saving up , I don't think an investing partners would trust a newbie either. So I can afford very very minimal down payments. 

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Are you house hacking?  If that's the case, then the numbers aren't SOO bad.  Yeah, you're negative, but you're not figuring in YOUR cost of living.  Doing down that rabbit hole a bit... What's your rent currently?  If you move in and you're only $100 down per month after expenses, then you're only paying $100 in rent.  That's not so bad.  That number isn't entirely accurate, as it doesn't account for your unit's capex, repairs, etc, but the point is the same.

Since this is a multifamily, try breaking it down to the units, so you can show your work a bit better.  Is this a duplex, triplex, 4 plex?  Where's that 1700/ month coming from?  The numbers might not be so bad, but you'll have to dig a bit deeper.