@themultifamilyguy: Why a cheap $675K apartment building in South Carolina is actually a terrible deal. 📉🏢 $84,000 per door sounds like an absolute steal for an 8-unit property, but cheap pricing is usually a cover for bad returns and heavy red flags. Here’s how we underwrite the real numbers: The Setup: $675K purchase price funded with a $500K DSCR loan and $175K in down payment equity. The Major Red Flags: It’s located in an HOA with non-controlling ownership (huge pass for commercial investors), and having 1 vacant unit out of 8 tanks your occupancy down to 87%. The Math: In-place rents average $925/month, leaving an NOI of ~$40K–$45K. After paying $35K in annual debt service, you’re left with a thin $5,000 to $10,000/year in net cash flow. The Return: $7,500 in average cash flow on a $175,000 investment equals a 4% Cash-on-Cash return—if nothing breaks! Unless there's massive rent upside ($300+/unit) to force value, a 4% return isn't worth the risk. Cheap purchase prices don't automatically equal profitable investments. Save this breakdown to avoid falling into the "cheap deal" trap, and drop your thoughts in the comments! 👇 . . . #realestateinvesting #multifamily #commercialrealestate #underwriting #cashflow

themultifamilyguy

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Wednesday 30 September 2026 16:06:38 GMT