DAZE & CONFUSED.... Don't How to go about this one HELP!

General Real Estate Investing
1

I have a potenial deal here’s the

Details
Type: Multifamily
Garden/Low-Rise
No. Units: 16
Building Size: 9,964 SF
Price: $1,265,000
Price/Unit: $79,063
Cap Rate: 7.24%
Scheduled Gross Income: $179,483
Effective Gross Income: $170,509
Operating Expenses: $70,431
Net Operating Income: $100,078

Income

Gross 179,483
Vacancy 8,974

Total= 170,509

Expenses

Taxes 16,388
Fuel 14,000
Electric 2,800
Repairs 6,400
Insurance 10,500
Water/Sewer 11,200
Super 8,343

Total= 70,431

5% Mangement Fee

NOI 91,553

The broker says i need to come up with about 25% down since the current mortgage is assumable est 400k the mortgage balance is 800k but i am alittle new to this so I was wondering how I can come up with some creative ways to fund this deal if it is a deal at all.

Assumable Mortgage
Interest Rate: 6.00%
Due In: 5
Annual Debt Service: $48,000

Loan Description:
Interest only

I am very anxious to do something :banghead

2

Ok, I am going to give you a hand with this.

I do not see the following items.

Advertising Expense
Landscaping Maintence Expense
Snow Removal Expense - Depending on your location.
Accounting Expense
Basic Unit Maintence Expense - Plugged toilets, Backed up sinks, Broken appliances, Repairing Blinds, etc.

Now your Repairs budget is only $6400 thats $0.64 per sq. Ft.
This is extremely low for painting, exterior, roofing, parking lot, etc.

The cost per unit is too high in relation to income!

My personal opinion is “This is no deal at all”.

3

This is 48k/yr interest only. Payments on a fully 20-year amortized loan would be a shade under $7k/mo or an actual $82,777.44, which would bring us to $165k to make the price close to look at.

In other words, this might be a good deal at $800k, lower would be better. $1.2mil, especially in this market, is way overpriced, unless you have some very strong information that you can quickly turn it around and drastically improve vacancies/rents to about $240k/annual gross, IMHO. There are much better deals out there.