It looks like a good deal to me with good cash on cash, Enough cashflow to cover expenses and it looks like you might even be over spending on maintenance and CapEx in your calculation. You have enough cashflow to cover unexpected issues. It seems like a deal to jump on... Definitely see what others say since I'm new to real estate.
Thanks Dustin! The numbers work for cash-flow. I'm unsure of the rental market and the equity potential is low. Doing my homework:)
Cap rates are relative to the area. Where is this project located?
@Nando Gapasin I don't see utilities on here at all - are tenants paying all utilities? I would guess you'll probably need to spend a little more than $1500 for an 8 unit property even if it is "well maintained." Also, it looks like you're only planning on putting 10% down and this seems low. Because it's more than 4 units, this will be a commercial loan, and I think you'll have trouble getting that low interest rate and 10% down on a commercial loan.
Hi Danielle, thanks for analyzing this for me. I’m not 100% sure on the utilities. Also, I’ll need to reconfigure my numbers with commercial financing (i.e. large down, higher rate).
When you get your calculations correct it doesn’t look that great . You’ll be lucky to get 100 a door and on a million dollars that’s a lousy return indeed . This deal is marginal at best