My Multi Family Analysis - Dobbin Meadows , Magnolia TX
Disclaimer
The information included is my analysis on what might constitute a good investment in the multi family space. It is not meant to be an investment advice. These are rather my thoughts to share with friends and family so that they find out flaws in my glaring assumptions, omissions etc
Property I
Meadows
Now lets run our analysis to determine whether it is a good deal or a bad deal
Area Analysis
Check for the following
- employment is strong and diverse ✓
- employment is spread across retail , healthcare, education and manufacturing
- supply demand , schools ( where can i get this information - costar )
- unemployment trend vs national ✓
- 3% vs national un-employment rate of 6.7% ref. bls report
- no one industry > 15% ✓
- no one company > 15% ✓
500-1,000 Employees
Gerdau Ameristeel, steel manufacturing
Midlothian ISD, public education
200-499 Employees
Wal-Mart Stores, retail
Toys"R"Us, warehouse
Texas Industries, cement production
Holcim Texas, cement production
100-199 Employees
City of Midlothian, local government
Ashgrove Cement, cement production
Methodist Medical Center, health care
MidTexas International, auto processing
50-99 Employees
Ennis Inc., corporate headquarters
Navarro College, education
American National Power, electric power generation
Niagara LaSalle Corporation, steel production
- Affordability ✓
- Average rent range based on gross monthly income range ( max is 1/3 )
1/3*33,000 = 1100$/month is the max rent we are looking at . From the analysis spreadsheet average rent for a duplex unit is 875-950
- Cash on Cash Return - Base Hit 8% ✓
- From the spreadsheet, it is just 4.75%
- What Cap Rate do we need
- Is a 5 cap rate good or bad ?
- Units & Occupancy
- What percent of renters are considered good ?
- What insights can we have here ?
- Is the number of existing multi families good or bad ?
- Is the owner occupied percent being greater than 80% , a thing to worry about ?
- IRR ( Atleast 15% after 5 years)
- Not sure how to calculate
- Deal / No Deal ✓
- Currently it is a "No Deal" as Cash on Cash Return is not above 8%( avg stock market return) for further analysis
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