see calculation below---costs are too high

Based on the information you provided, it is a 20-units small complex, rent is about $1000/month/unit. Price is $2.4 million. If downpay 25% (0.6 million), the loan is 1.8 million.

 

Rent = $20,000/month x 12 = $240,000/year

 

Vacancy= $240,000 x 5% = $12,000 (if assuming 5% vacancy)

utility= $1500/unit/year x 20 units = $30.000  (this cost is too high)

Tax= $3000/month x 12 months = $36,000 (this tax is too high)

insurance = $1000/unit/year x 20 units = $20,000  (this insurance is too high)

repair/maintenance = $100/unit/month x 20 units x 12 months = $24,000 (considering high cost near ocean)

reserve = $50/month x 20 units x 12 months = $12,000

Total costs= $134,000

 

NOI= $240,000 - $134,000 = $106,000

If taking $1.8 million loan at 6.5% (30-years fixed), mortgage= $11377/month x 12 months = $136,524

Net profit = $106,000 - $136524 = - $30524/year (negative cash flow about $2500/month)

Cap rate = $106,000/ $2,400,000 = 4.4% (too low compared to 6.5% mortgage rate which is your break even point)

 

To summarize, the utilities/insurance/tax are all too high compared to average multiple families.

 

所有跟帖： 

• 算得好，你这算法才正确，仅算还贷地税和保险，会倒贴不少。我只心算算，就知道卖家没计算维修空置等，看似打平，其实做不动。 -守月- ♀ (75 bytes) () 02/13/2023 postreply 13:19:26