For April, we are crunching the financials on a 10 Unit Income Property that sold during March in Vanier
This property was a conventional 10 Unit Building with an assumable mortgage!
Vanier 10 Unit Building, Sold March 2018
|Scheduled Rental Income (SRI)||$126,990|
|Effective Rental Income (ERI)||$121,910|
|Total Operating Expenses (TOE)||$40,216|
|Net Operating Income (NOI)||$81,694|
|Capitalization Rate (CAP)||4.8%|
|Operating Expense Ratio (OER)||33%|
|Sales Price X Net Income||21|
|Mortgage (@ 3.25%)||$1,105,000|
|Annual Debt Service (mortgage payments)||$80,938|
|Return on Investment (ROI)||0.12%|
What is very interesting is that the buyer for this Investment Property assumed a mortgage from the seller at 3.57% and the banks would have applied a mortgage rate of about 5.5%, so this meant that his cash flow every year went from just $756, up to $10,380 and his mortgage payments went from $80,938 down to $71,314.
This Buyer seems to have got a pretty good deal and has a CAP Rate of 4.8% on this Investment and a nice positive cash flow with a 35% down-payment.
Check out some Income Properties for sale, get in touch with Patrick Walchuk if you want to buy or sell any type of Income & Investment Property.