First Time Investor - Help Me - Is This a Good Deal?

[Bob S.]

Hi All. I've only posted a few times as I've been trying to "simulate" deals as I find them - but haven't jumped on anything yet.

I originally considered condos but they are out of the question now due to HOA irregularities and unexpected circumstances. I'll leave it at that.

Can somebody analyze the work below for me and let me know if this is a potentially good deal?

4 Unit Building (one floor/ranch style) - located in Chicago suburbs. Asking price $389k. Built in 1962.

$3475 gross rent or $41700 annual rent

$8044 annual tax

Tenants pay electric

-- Let's also add in...

Insurance - not quite sure on this one - let's call it $500 a month? I have no idea honestly - nor do I know how to figure this out.

10% overhead for vacancy or - $347 per month

Replacement/maintenance reserve at 5% - $174 per month

Net profit per month: $2454 - is this accurate?

If I put 20% down on a conventional 30-year mortgage at 4.25% (the current going rate), the monthly mortgage cost is $2307.

This nets me a minimum of $147/month and maximum (with no need to use any reserves and no vacancies) of $668.

Am I doing the math correctly? Am I missing any factors? Am I "playing devils advocate" suffciently?

That's it for unit details that I have without approaching the seller.