Multifamily

How to pick out a good multifamily investment?

Checkout the spread sheet below!

Item	Rate	Value	Formula
Market Value		$995,000
Purchase Price		$995,000
Initial Equity		0	market value - purchase price
Down Payment	20%	$199,000	rate * purchase price
Closing Cost	1.5%	$14,925	rate * purchase price
Rehab Cost	0	$0
Cash Invested		$213,925	downpayment + closing cost + rehab cost
Rent Per Unit		$2897.5
Num of Units		2
Monthly Operating Revenue		$5795	num of units * rent per unit
Debt Service	3%	$3355.97	PMT(rate, num payments, principal)
Taxes	1.25%	$1036.46	market value * rate / 12
HOA
Insurance	0.48%	$398	market value * rate / 12
PM			rate * monthly operating revenue
CapEx	5%	$289.75	rate * monthly operating revenue
Vacancy Rate	5%	$289.75	rate * monthly operating revenue
Monthly Operating Expense		$5369.93
Monthly Cash Flow		$425.07	monthly operating revenue / monthly operating expense
Gross Operating Income		$5100.88	monthly cash flow * 12
Gross Rent Multiplier		14.31	purchase price / (12 * monthly operating expense)
CapRate		0.51%	gross operating income / purchase price
CashOnCash Return		2.38%	gross operating income / cash invested

I like to look at the cash on cash return and cap rate as key indicators of a good investment.

Email me for a copy of the whole excel spreadsheet and start analyzing properties!