20 Unit Apartment Complex, Need Advice!
Looking to the experts here to assist me with crunching some numbers on this property. Below was supplied by owner. Looking for validation that nothing is missing / does not make sense / price is right considering below / etc. Year Built 1971 Description: 2 Buildings of 10 units each (10 2 bdrm, 10 1 bdrm) w/ coin op laundry - on 8 acres - Northwestern Connecticut Price: 1,299,999 Here are the stats: Actual Income: $168,829 Proforma: 175,009 Expense: 48,819 NOI: $126,190 (based on proforma) Cap: 10% Expenses (/ yr): Taxes: $16,247 Insurance: 4,180 Oil: 7,574 Septic: 1,500 Water Service: 5,016 Trash: 3,647 Exterior Maint.: 1,220 (snow & lawn) Electric: 2,480 Plumbing: 1,258 Misc: 200 Advertising: 432 Vacancy (3%): 5,065 Many thanks for any insight, I am new here! - James[ Edited by jd0101 on Date 03/23/2005 ]
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I would plug in different Numbers to come up with the NOI.
Underwriters will look at this as if they would be getting it back from foreclosure.
I would allow
5% for vacancies
5% for Management
5% for repairs
Even if you figure that you will do your own management, they will figure that they would have to hire one,and do repairs, and have vacancies.
Good Luck,
Robert
There is no money in this deal assuming a 25% downpayment!!
Here are my numbers (Rounded, yearly):
Purchase Price: 1.3M
Downpayment: 325K
Amount Financed: 975K
Income: 169K
5% Management,5%Vacancy,3% Repairs = 169K * 13% = 22K
Expenses: 49K
Financing at 8.5% for 30 years: $90K
Cash Flow = 169K-22K-49K-90K = 8K
Rate of Return on Cash Invested = 8K/325K = 2.5%
Heck, you can get better return than this.