Breaking down the financials from the sale of this 9 unit building
Here is the financial analysis from the sale of this 9 unit building from the Lowertown neighbourhood in Ottawa. This property was fire retrofit. List Price was $2,999,000 and it sold for $3,050,000
Notable numbers from this sale:
- Scheduled rental income was $181,980
- Effective rental income of $176,521
- Operating expenses were $37,815
- Total operating expenses were $55,467
- Net Operating income was $121,054
- Operating expense ratio of 31.4%
- Sold for 17 times the gross income
- Sold for 25 times the Net Income
With a 35% downpayment of $1,067,500, the mortgage amount would be $1,982,500, which would cost this buyer $9,380 per month, or $112,650 yearly as the annual mortgage payments.
This gives us a cash flow of $8,404 per year, or a return on this investment of 0.79%. Is this a good deal, someone thought so, and it does have a positive cash flow with a 35% downpayment.