Is this a good deal?

[Matthew Trieber]

Hello all,

I am starting to look for my second buy and hold property, and wanted to run the details past others to get opinions and ensure that I'm getting a good deal. The property is a four-plex, asking $139,900 and is fully rented. The gross rents are $39,600 per year. Assuming a 13% vacancy rate, yearly NOI is $17,000, which includes $3,750/year for unexpected repairs. I plan on slowly fixing up units when they become vacant.

One of the issues is that the property is located in a flood zone, although it has never flooded and has a dry basement. I’ve never purchased a property in a flood zone. Is having flood insurance enough to mitigate this issue, or should I adjust the offer price to account for this detriment?

I’d appreciate any comments or thoughts that any of you have about these numbers, if it’s a good deal, or recommended offer prices. Thanks for the help!

Matt