We found a 7 Unit apartment building that sold in June and below are the financials on it.
There was a mix of bachelor apartments as well as 1, 2 and 3 bedroom apartments. It took 65 days to sell and it sold for $44,000 under the asking price.
This building had One Apartment that was said to suitable as an Owner Occupant Apartment, and maybe that is why this buyer bought the building, to live-in. The Return on Investment here is negative.
Centretown 7 Unit Building, Sold June 2018
|Scheduled Rental Income (SRI)||$100,152|
|Effective Rental Income (ERI)||$96,146|
|Total Operating Expenses (TOE)||$36,496|
|Net Operating Income (NOI)||$59,650|
|Capitalization Rate (CAP)||4.2%|
|Operating Expense Ratio (OER)||38%|
|Sales Price X Net Income||24|
|Mortgage (@ 5.5%)||$926,250|
|Annual Debt Service (mortgage payments)||$67,845|
|Cash Flow||- $8,195|
|Return on Investment (ROI)||- 1.6%|
At first glance in the table above, you can see that this buyer would be having an $8000 loss in the first year if they had a 35% downpayment. This property did have a 4.2% Cap Rate.
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