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 ]
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.