Buying Out Units in a Fourplex

[Bonnie Murphy]

I own and occupy a condo in a 4-unit residential building, that has a commercial unit attached for a total of 5 units. I got this property for a steal as a foreclosure through a first time home buyer program. I have had the property for 5 years, but now I am financially in a position to afford to buy another unit, or two if I can.

The current owner of said two units is the president of the condo association, and would pass on the property management duties to me, at a rate of $300/mo with the purchase of the units. I would reinvest this revenue back into my rental business.

The cash would flow at about $500/unit each month after expenses. I would be stupid not to take this deal, right? $325k for both units combined, in an area about 20 min south of Boston. I have about $50k in equity on my unit to borrow for the down payment (using HELOC up to 80% LTV).

What are your thoughts? Thanks!

Bonnie