Help with evaluating a multifamily property in Burkburnett, TX

[Doyle Cook]

On April 1, 2019, I am participating in a BP 90-day challenge to purchase my first multifamily property. This weekend, I looked at several properties in Burkburnett, TX (near Sheppard Air Force Base).  On one lot is a studio house, a duplex, and another house. All three need substantial amounts of rehab work done.  The wholesaler/real estate broker offers a turn key package to include purchasing the property, rehabbing the property, disposing of the debris, etc.  He also provides property management services upon completion of the rehabs. I'd love to have some assistance evaluating if this is a smart investment because if it is then I'm going to jump into getting it financed.  Some more details:

Price: $34,500

Rehab estimates provided by wholesaler's Project Manager: $74K

Owner Finance Option: $6K Down, 6% Interest Only Monthly, 2 Years (Or Until Refi).

ARV= $158K at $55 a Sq.Ft

Potential Rental income= $2,650

• There would 4 total bathrooms if you included the house.
• 2,810 Sq. Ft including the house.  Without it = 1,910 Sq. Ft.
• Lot size = 15,002.06
• I'll need to add heating and cooling; currently window units.
• P&B construction for the houses and duplex, slab for the studio.
• Total projected gross rents= $750 Studio+$950 Unit 1+$950 Unit 2.
• The whole project would be a value add: windows, bathroom, update kitchen, furniture, solar panels, water purifier.
• I'm considering adding solar panels - would mean that I can charge for my own electricity sense I would be the power company.
• Property Management fees = 7% (wholesaler/broker number).
• Projected Vacancy Rate = 5% (wholesaler/broker number).
• CapEx = 5% (wholesaler/broker number).
• The military gets their BAH/BAS evaluated every year and it goes up about 2.5% based on the market conditions.
• Property growth annually would fit in to a 3% number as its not the fastest appreciation market.
• Your annual expenses should be about 1.5%-2% depends on how well of a job is done with the rehab.

P.S. The thought with the last house is to tear it down completely and put in storage to store furniture that I might rent out to the tenants.