This isn't going to be a perfect analysis, probably far from it, but it may be a chance to get some feedback to improve the skill.
I looked on loopnet for a good Fourplex to analyze. I found this one; It's located in Toledo.
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] [https://www.loopnet.com/Listing/5544-Cresthaven-Ln-Toledo-OH/17059504/]
Looking through the page for useful information that I can put into a calculator, I find that they ask $230,000 for it. It has 4 units with $600 rent and no sign of vending machines or laundry, so $2,400 Gross Monthly Income, $28,800 Gross Annual Income. Need to account for Vacancy, though. Estimating 10%, the Effective Gross Income is $25,920. Now on to expenses; there doesn't appear to be any info on that on the page, but there is a Brochure PDF. 50% rule suggests they should be around $14,400
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The first page says it's fully occupied, well maintained, easy to manage, with opportunities to raise rents and lower assessment value. Sounds like standard salesy stuff. Second page is a Wall of Text disclaimer. Page 3 and 4 have more information, and page 5 looks like a NOI analysis, that should be useful for finding the expenses.
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Looks like the total expenses are… $15,801. That's actually more than the $14,400 estimate, and it doesn't account for everything on my calculator. Also they put 3% for their vacancy. But that's okay, I'll plug these numbers into my calculator, keeping the 10% vacancy. That brings our NOI to $11,119. Now Let's move on to the debt.
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If I were to pay it in full upfront, the cash flow would be the same as the NOI. But I don't have $230,000 lying around anywhere, so I'd need to get a loan. The standard loan has a 20% Down Payment, so mine would be $46,000 for a loan of $184,000. According to bankrate.com, assuming a 30 year at 4% interest (good assumption?), The monthly payment would be $1,249. That would make the Debt Service $14,988, and the cash flow at -$3,869. Yikes. Looks like the property could support itself, but not the loan. The maximum monthly payment it could support and still have $100 positive cash flow is $918.
So is it a good deal? From this analysis, not unless you can afford a 50% Down Payment. I think the real question is how could it work? Definitely would need to find ways to increase income and reduce expenses. Maybe I'm looking at the wrong exit strategy for this property. I doubt anyone would want to partner 5050 on the 50% DP for that kind of cash flow. It just doesn't sound like a good deal.
Okay well that's my attempt. It's probably really rough on the edges, maybe even cringy or stupid, but it's not here to be good. I hope to get some feedback and constructive criticism on it. Were there parts I missed? Things I didn't consider? Too wordy? Any advice for my next analysis? I don't really know how to end this either, so thanks for reading this. Have a great day!
P.S. Also I guess I'm kinda scared of networking. Not scared of meeting new people, but of not having anything to talk about. If I had lunch with someone I connect with here on BP, is this something I could talk about?
