Multifamily Analysis Help Needed - Posted by dave
Posted by dave on April 06, 2000 at 13:02:59:
I am a newbie to Rental Property and am wondering if I can turn this into a ‘do-able’ deal. I know that it is not there today… looking for ideas on a counter… 8 unit; average condition for neighborhood; average to above average need for light maintenance; On to the financials:
Gross Rents = 53,000
elect, gas, water, garbage, tax & ins = 11,000
I added 3% for mgmt & 250 per unit maint = 3,600
NOI = $38,400
Institutional Lender 75% LTV; 9.375%int; 20yr
Debt service = 28,800 yr.
Seller carry 25% LTV; 8%int; 20yr amort; 5yr ballon
Debt service = 9,200 yr.
Cashflow $1,000 yr.
So far this is sounding bad but here’s my dilema; the cap rate is 11.5 (good cap in my opinion) and naturally the seller feels the rents can be increased 10%…good neighborhood, etc.?
Does anyone have any ideas on ways that I could counter? He wants to 1031 it. The most obvious is price… but I have to think outside of the box on this one… It has to cashflow and I don’t want to put my money on the line…
Any ideas would be appreciated…
thanks in advance.