Financials on a 4 Unit Multi-Family Building in The Centretown Neighbourhood, Ottawa
This month we are looking at an older semi-detached, renovated property that was being used as a Fourplex, it sold in June 2017 and here are all of the financials on it. Looks very decent. The Cap Rate on this building was 4.7%.
Centretown 4 Unit Building, Sold June 2017 |
|
| Selling Price | $795,000 |
| Scheduled Rental Income (SRI) | $56,100 |
| Effective Rental Income (ERI) | $53,856 |
| Total Operating Expenses (TOE) | $16,193 |
| Net Operating Income (NOI) | $37,663 |
| Capitalization Rate (CAP) | 4.7% |
| Operating Expense Ratio (OER) | 30% |
| Sales Price X Net Income | 21 |
| 35% Downpayment | $278,250 |
| Mortgage (@ 3.3%) | $516,750 |
| Annual Debt Service (mortgage payments) | $29,346 |
| Cash Flow | $8,317 |
| Return on Investment (ROI) | 3% |
From the numbers above, we mentioned that the Cap Rate of 4.7% was very good, and when we look at the Expense Ratio of 30%, this is quite low, so the buyer did quite well buying this building. Only 30% of the income will go towards the expenses.
The cash-flow at the end of the year, with a 35% downpayment was positive and that's what you like to see. This buyer has $8,317 positice cash flow which equates to a 3% return on their investment.
All-in-all this looks like it was a very good buy for the new investor.
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