Investment Property in the Central West End

Dawn Griffin Posted by
Investment Spotlight Dec 2007

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This is a six unit building on Laclede with the Park East Tower to the east and Forest Park to the west. Each unit has approximately 1100 sq. feet, two bedroom and a finished porch off the kitchen.

Gross potential income at $900 a month per unit=$64,800.00 less vacancy at 5% ($3240) less yearly debt service ($38,328 with purchase price of $600,000, 20% down, 30 year fixed at 7%)

Gross Operating Income of $23,232.00

Net Operating Income of $13,232

Capitalization Rate of 2%

(Taxes are just under $4000, Insurance was estimated at $3000 Utilities and Misc estimated at $3000). To learn more about NOI click here or Cap Rate here.

This is a superior location close to the park, BJC, Metrolink, universities and all the amenities of the CWE. Seemingly you would have your choice of tenants. But a cap rate of 2% is terrible. Things to help ensure a better cap rate would be a lower sale price, a higher down payment or a better interest rate.

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