16 unit apartment analysis

7 Replies

@Rick Kelley Better go back to the calculator. No vacancy, on commercial they will automatically do 5%. You have 0%. This looks a proforma analysis. No capex and repairs $2400 per year. A couple of toilets clogged and some appliance needing repair will eat that amount up. Look a t floor capex. Each unit has 800 sf of flooring, brand new today.  800*16= 12800 sf of flooring @ $6 sf for flooring and install=$76800/8 year life span/12 months in a year=$800 per month in floor capex. Other items that need to be budgeted : appliances 12 years, hot water heater 12 years, roof 25 years unless flat then 15,HVAC 20 years, etc. Anything that will need to be replaced has to be budgeted. Just with floor capex this will be a money loser.

Good morning Tim,

Thank you so much for your input. I will change the vacancy and the capex sections to 5%. I just joined Bigger Pockets and this is my first post. Thank you so much for your help!

Rick Kelley

@Rick Kelley You need to learn to tag people. Use the @ sign and start typing their name. I t will appear double click and their name will be in blue in the comment area and they are notified about the discussion. I am a single family buy and hold. I use 8% vacancy,5% repairs and 10% capex. Just because it is a multi I don't think 5% capex will be enough. There is a spreadsheet in the files section that lists most replaceable items and their lifespans to judge how much capex is necessary per month.

@Rick Kelley , I looked at the report.  Why are you excited about this place?  

According to the report, you're feeding this alligator $500 cash flow out of your own pocket each month, and the ARV is LOWER than the total project cost,making refinancing difficult.

30 year amortization will take forever to generate equity via pay down of principle.  

Also, the repair budget is $1000....for a property that was last renovated in 1970, according to the report.  That seems grossly optimistic.

I ask again....what's got you excited about this place?  Per the report, it's horrible.