A quintuplex (2 commercial and 3 residential units) is available for sale at a asking...
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A quintuplex (2 commercial and 3 residential units) is available for sale at a asking price of $2.5 million. The properties main characteristics are (Centris 2021):
Building characteristic (Centris 2021)
Built in 1957
3201 Sqft
Residential units with terrace
2 x 4.5
1 x 6.5
Commercial units
800 to 3675 sqft
6 feet basement
A financial analysis will be done based on the three following scenarios:
Pessimistic scenario
Purchase price is at a 3.8% markup ($2,595,000.00)
5% down payment was given
LTV= 95%
Mortgage default insurance is needed at 4.00% premium
Most likely scenario
Purchase price is at a 2% markup ($2,550,000.00)
15% down payment was given
LTV= 85%
Mortgage default insurance is needed at a 2.80% premium
Optimistic scenario
Purchase price is equal to asking price ($2,500,000.00)
20% down payment was given
LTV= 80%
Mortgage default insurance is optional.
1-Calculate the NOI and the cashflow( please include the step by step process)
Answer & Explanation
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