4-Unit Building Sold in Lowertown

Posted by George Bradie on Wednesday, November 15th, 2017 at 2:25pm.

Here are all of the financials from the recent sale of a 4 Unit Building in Lowertown in Oct. 2017

Patrick Walchuk walks you through all of the financial information from this recent sale. You decide if this buyer got a good return on his money or not, we think so!

Lowertown 4 Unit Building, Sold Oct. 2017
Listed Price $995,000

Selling Price $995,000
Scheduled Rental Income (SRI) $81,120
Effective Rental Income (ERI) $77,875
Total Operating Expenses (TOE) $24,902
Net Operating Income (NOI) $52,973
Capitalization Rate (CAP) 5.3%
Operating Expense Ratio (OER) 45%
Sales Price X Net Income 32%
35% Downpayment $384,250
Mortgage (@ 3.25%) $610,750
Annual Debt Service (mortgage payments) $36,591
Cash Flow $16,382
Return on Investment (ROI) 4.3%

From the table above, you can see that this Building sold for full price, and it sold after being listed for just 7 days. The Cap Rate is decent, the Cash Flow is excellent, with the buyer getting over $16,000 every year to put in their pocket (with a 35% downpayment)

At the end of the day, the Buyers' Return On Investment here was 4.3% which most investors would take Today. With the numbers looking so good on this property, we suspect that there was likely some work needing done, or coming up, but as long as the buyer was aware of this, we think this was a good buy.

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