THE GOAL:
TO PURCHASE AN INCOME PROPERTY IN ORANGE COUNTY
THAT CASH FLOWS!
Because prices have dropped 30%+ over the last 3 years and interest rates are at an all time low it is possible to find Investment Properties that will provide good cash flow are now SOLID LONG TERM APARTMENT PROPERTY INVESTMENTS!
Below is a sample of a 4 Unit property, a Short Sale, where we represented the BUYER which closed this quarter. The short sale process for this 4 Unit took approximately 4 months to complete.
The Investment Analysis below should help you to evaluate all of your future investments to make sure the Property you are looking at is indeed a solid investment:
2103 E. Almont in Anaheim
4 Units
Closed: 4th Qtr. 2010
Front View
Courtyard View
Garages
Investment Analysis (Actual not Pro Forma)
Sold Price $590,000
Down Payment (25%) $147,500
Loan Amount $442,500
Loan Type 30 Year Fixed @ 4.5%
P.I.T.I
Annual Debt Service (P & I) $26,904
Monthly Debt Service $2,242
Anaheim Property Tax Rate 1.09%
Annual Property Taxes (1.09%) $6,431
Insurance (Yearly) $1,600
4 Unit Mix & Income (Actual)
3 BR / 1.75 BA $1,550
2 BR / 1 BA $1,300
1 BR / 1 BA $1,000
1 BR / 1 BA $975
Laundry (Leased) $50
Monthly Gross Income $4,875
Annual GSI $58,500
Actual Expenses
Vacancy (3% of GSI) $1,755
Electric $780
Gas $1,080
Water $1,020
Gardener $600
Maintenance (5%) $2,837
Trash $0
Property Management $0
Total Expenses $8,072
Expense % of GSI 13.80%
Total Operating Expenses
as % of GSI (Expenses +
Taxes + Insurance) 27.53%
Annual Cash Flow $15,493
Monthly Cash Flow $1,291
Investment Indicators based on Sold Price
Cap Rate (Actual) 7.19%
Gross Rent Multiplier (Actual) 10.09
Cost to Buyer to Purchase Property
Down payment (25%) $147,500
Title & Escrow Costs $2,422
Lender Costs including
Prepaid Insurance $7,680
Short Sale Fees $15,775
Less Negotiation Credit $12,500
Total Cost for buyer to
Purchase $160,877
Buyer Cost as Percent of
Total Cost to Purchase Price 27%
Property Description
Building Sqft 3,891
Lot Size 9,000
# Garage 4 Garage Single Spaces
Metered:
Gas: 5 Meters
Electric: 5 Meters
Water: 1 Meter
As you can see in the above evaluation with approximately 27% Down Payment on a Sales price of $590,000 this property will cash flow annually an amount of $15,493 or nearly $1,300 per month. I would consider the building and location a B- to C+ rating in the city of Anaheim. This single story set of 4 units was purchased by a couple for their first investment and they properly evaluated cash flow and weighed in location with respect to their investment needs.
Our job is to evaluate location, income & expenses and assist you in either identifying a good investment or selling your property at the right price.
Have other related questions? Call 1-888-55-UNITS.
(1-888-558-6487) or email: patrick@schwierassociates.com
Patrick Schwier
Broker/Multi-Family Investment Specialist
Web: www.schwierassociates.com
Email: patrick@schwierassociates.com
Ph: 1-888-558-6487
