Posted by Commercial Investor on February 18, 2005 at 15:38:26:
Based on my calculations, I get a cap rate of 8.8% which still isn’t too bad. Property looks pretty good based on the numbers. It’s a lot better than what I can get in my town. It’s usually 289k for a 4 unit and we don’t even get $625/month for each unit.
6 unit Gem…some advice needed - Posted by Jerry
Posted by Jerry on February 15, 2005 at 22:00:33:
I have come upon a fully rented 6 unit apartment building with rents averaging $625/month. Gross monthly income is $3700 and yearly gross is $44,400. The expenses listed come to $19K/year. The owner is retiring and is asking $289K. Cash flow would seem to be $1000 or more depending on the type of mortgage I look for. The owner has made improvements and said it will dramatically increase the price of the buildng (but I dont know if that is her way of trying to sell it quicker…I’m a newbie). Plus a new commuter train to the city is starting from this town by end of 2005. I had someone run some numbers for me and said this commercial prop. would have an approx. cap rate of 10. They think its a winner and was wondering if someone could give me some feedback. I cant imagine this property going for just $289K. I would like to sell it for a profit in a couple of years maybe since the Boston area is so expensive and this one of the few remaining cheap towns. Feedback would be great ASAP. Thanks