Multifamily Quick Analysis

Everett - Rainier DrEverett Property:

Price $2,980,000.00 $616,000.00
Rehab $100,000.00
Units 26
Year 1 Year 2 Year 3 Year 4 Year 5
GSI $250,260.00 $255,265.20 $260,370.50 $265,577.91 $270,889.47
Laundry/Coin Op
Storage
Vacancy $17,518.20 $17,868.56 $18,225.94 $18,590.45 $18,962.26
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
GOI $232,741.80 $237,396.64 $242,144.57 $246,987.46 $251,927.21
Maint 10.00% $25,026.00 $25,526.52 $26,037.05 $26,557.79 $27,088.95
Management 6.00% $15,015.60 $15,315.91 $15,622.23 $15,934.67 $16,253.37
Account/Legal 3.00% $7,507.80 $7,657.96 $7,811.12 $7,967.34 $8,126.68
Evictions 1.00% $2,502.60 $2,552.65 $2,603.71 $2,655.78 $2,708.89
Advert 1.00% $2,502.60 $2,552.65 $2,603.71 $2,655.78 $2,708.89
Insurance 3.50% $8,759.10 $8,934.28 $9,112.97 $9,295.23 $9,481.13
Utilities 5.00% $12,513.00 $12,763.26 $13,018.53 $13,278.90 $13,544.47
Trash 5.00% $12,513.00 $12,763.26 $13,018.53 $13,278.90 $13,544.47
CapEx $350.00 $9,100.00 $9,282.00 $9,467.64 $9,656.99 $9,850.13
Taxes 11.00% $27,528.60 $28,079.17 $28,640.76 $29,213.57 $29,797.84
Total Exp $122,968.30 $125,427.67 $127,936.22 $130,494.94 $133,104.84
NOI $109,773.50 $111,968.97 $114,208.35 $116,492.52 $118,822.37
Mortgage $167,883.85 $167,883.85 $167,883.85 $167,883.85 $167,883.85
$0.00 $0.00 $0.00 $0.00
Free Cash Flow -$58,110.35 -$55,914.88 -$53,675.50 -$51,391.34 -$49,061.49
DSCR 0.65 0.67 0.68 0.69 0.71
Projected Cash Flow -$58,110 -$55,915 -$53,676 -$51,391 -$49,061
ROI -4.18% -7.85% -11.01% -13.81% -16.22%
COC -9.43% -9.08% -8.71% -8.34% -7.96%
Value @ 2.5 Cap 2.50% $4,390,940 $4,478,759 $4,568,334 $4,659,701 $4,752,895
Value @ 3.5 Cap 3.50% $3,136,386 $3,199,113 $3,263,096 $3,328,358 $3,394,925
Value @ 5 Cap 5.00% $2,195,470 $2,239,379 $2,284,167 $2,329,850 $2,376,447
ROI $672,385.71 $735,113.43 $799,095.70 $864,357.61 $930,924.76
ROI on Sale 109.15% 119.34% 129.72% 140.32% 151.12%

Redmond - 170th

Redmond Property:

Price $2,820,000.00 $564,000.00
Rehab
Units 12
Year 1 Year 2 Year 3 Year 4 Year 5
GSI $183,540.00 $187,210.80 $190,955.02 $194,774.12 $198,669.60
Laundry/Coin Op
Storage
Vacancy $12,847.80 $13,104.76 $13,366.85 $13,634.19 $13,906.87
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
GOI $170,692.20 $174,106.04 $177,588.16 $181,139.93 $184,762.73
Maint 10.00% $18,354.00 $18,721.08 $19,095.50 $19,477.41 $19,866.96
Management 6.00% $11,012.40 $11,232.65 $11,457.30 $11,686.45 $11,920.18
Account/Legal 3.00% $5,506.20 $5,616.32 $5,728.65 $5,843.22 $5,960.09
Evictions 1.00% $1,835.40 $1,872.11 $1,909.55 $1,947.74 $1,986.70
Advert 1.00% $1,835.40 $1,872.11 $1,909.55 $1,947.74 $1,986.70
Insurance 3.50% $6,423.90 $6,552.38 $6,683.43 $6,817.09 $6,953.44
Utilities 5.00% $9,177.00 $9,360.54 $9,547.75 $9,738.71 $9,933.48
Trash 5.00% $9,177.00 $9,360.54 $9,547.75 $9,738.71 $9,933.48
CapEx $350.00 $4,200.00 $4,284.00 $4,369.68 $4,457.07 $4,546.22
Taxes 11.00% $20,189.40 $20,593.19 $21,005.05 $21,425.15 $21,853.66
Total Exp $87,710.70 $89,464.91 $91,254.21 $93,079.30 $94,940.88
NOI $82,981.50 $84,641.13 $86,333.95 $88,060.63 $89,821.84
Mortgage $153,711.84 $153,711.84 $153,711.84 $153,711.84 $153,711.84
$0.00 $0.00 $0.00 $0.00
Free Cash Flow -$70,730.34 -$69,070.71 -$67,377.89 -$65,651.21 -$63,889.99
DSCR 0.54 0.55 0.56 0.57 0.58
Projected Cash Flow -$70,730 -$69,071 -$67,378 -$65,651 -$63,890
ROI -7.29% -14.12% -20.48% -26.54% -32.29%
COC -12.54% -12.25% -11.95% -11.64% -11.33%
Value @ 5 Cap 2.50% $3,319,260 $3,385,645 $3,453,358 $3,522,425 $3,592,874
Value @ 6.5 Cap 3.50% $2,370,900 $2,418,318 $2,466,684 $2,516,018 $2,566,338
Value @ 10 Cap 5.00% $1,659,630 $1,692,823 $1,726,679 $1,761,213 $1,796,437
ROI $114,900.00 $162,318.00 $210,684.36 $260,018.05 $310,338.41
ROI on Sale 20.37% 28.78% 37.36% 46.10% 55.02%

 

So the big reveal: None of these properties can be financed to produce cash flow, they need to be purchased with more than 50-60% down to cash-flow in their current state.  Or, this bottom one, in Redmond would need to be pushed from $1275/mo in rent to $2,400/mo in rent an increase of almost 2x!  I’m not saying that the property wouldn’t be able to handle those kind of rent increases, but that’s quite the turn over, to get a measly $6k/yr in cash flow. (at 20% down)

Everett follows the same formula, 60% down to cashflow, or raising the rents by 50%, to bring in just about $6k/yr.  The may seem the same, but they are both Appreciation plays that one would not purchase with the intent of cash-flowing on.

 

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