Here is the breakdown of the financials from the sale of this triplex from an east end neighbourhood.
This building was listed for $1,250,000 and sold for $1,250,000 (full price)
- Scheduled Rental Income was $64,394
- Effective Rental Income was $62,462
- Operating expenses of $12,111
- Total Operating Expenses, with 10% for maintenance/management $18,357
- Net operating income of $44,105
- Cap Rate was 3.5%
- Operating Expense Ratio was 29.4%
- Sold for 20 times the Gross Income
The building Sold for 28 times the Net Income. With a 35% down payment of $437,500, this leaves a mortgage of $812,500. At a 3% mortgage rate, amortized over 25 years, the monthly mortgage payment would be $4,274, for an Annual Debt Service of $51,288 (this is the yearly mortgage payments).
The final cash flow on this building was minus $7,183 and the ROI (return on investment) was minus 1.64%.