Getting started and looking for input on a 4Plex

[Eric Nelson]

Hello, I'm in northern MN, and looking into getting into investing, and am looking for some advice.

I'm looking at a 4 plex locally with 4 2b 1ba units.

Cost is $160k, but I think it's worth closer to $180k.

Yearly Rent is $26,760.

I would use my heloc for down payment so basically financing the whole thing.

Love the location

Has 1 lifer(been there 7 years) the current owner has not raised rent on in a while and I probably wouldn't either.

Taxes are $3000

Tenants pay electric

Average local income is $35K with average house price is $138,582.

Seems like even @ $165k I'd be doing pretty well.

I'd self manage, and fix issues, but from what I can see, there are not any pressing CapX's needed.

Not sure on cost of heat yet.

Any other info needed?

I'd love some input on what thoughts are.

Thanks!

-Eric

[John Woodrich]

You didn't post enough numbers to really analyze it much.  One of the first things you will want to do is figure out which utilities you have to pay and how much they cost.  If the owner won't give you this information you can sometimes call and ask them for an average.  

Break it down monthly to figure out what your cash flow is for all of your out of pocket expenses.  Then you can play with the estimates (repairs, CapX, etc) to see where you are at.  Even if you plan to manage it your self I would put a management fee in as your next buyer may need it.  Would help you be conservative.