First Investment Deal Help: 4 Plex

[Lynn Tran]

Hello Bigger Pockets Family! 

I would love your advice for this 4 Plex property I'm on contract with where I'm worried if it's worth its trouble for the first year. Its in a good growing area in south Louisiana, but currently in a less than desirable area of town that's used to, but reduced, known to be dangerous but its shifting into a working class spot with new grocery stores and lots of growing neighborhoods nearby. 

The building is 4 units, each with 2 bed, 1.5 bath that has been nicely renovated in 2019. HVAC is noted to be 2 years old, new stairs for second story, new sheet rock. Roof is noted to be 8 years old. 3 units has granite countertops and 1 a has butcher block countertop. It says 2 year old appliances and plumbing. I'll be inheriting the current tenants. At the walk through, I only got to visit 2 of the units but they seemed to take care of their home. One that I met and she seems like a great tenant to keep. Realtor and I are curious if the other 2 unit tenants are less than desirable.

I'm going in for an inspection on this upcoming Tuesday.

I'll be using a FHA loan and will be putting 3.5% down. This is the general work up:

Purchase Price: $285,000

Closing Costs: $9,395
Down Payment: $10,000
=$19,395 Cash to Close

Monthly Note: $2,120.76 Based on locked 5.625% apr 30 year loan
(Principle & Interest: $1,610.90; Mortgage Insurances $194; Estimated Escrow $315 = $2120)

Monthly Property Taxes: $250

Monthly Insurance: $210

Monthly Maintenance: $100​

Total Monthly Expenses: $2,680

Total Income based on $750 mo x 3 units: $2,250

Total Income based on $750/mo x 4 units after year 1: $3,000

The going rate for rentals is $750, possibly could bring it up to $800 in the future. Please note with my FHA loan I will be living in 1 unit for house hacking, so I will have total income of $2250 for the first year. I will attempt to rent out a room in the unit but unsure how it will work out. What do you think of this deal and is it worth it? It's -$480 a month the first year where I worry about keeping it afloat, but I can manage it with working my job as long as my tenants at the other 3 units do not leave. The next year I will profit $320/mo once I move out and get another tenant in.

Any advice helps!