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Updated over 5 years ago,

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Thomas Don
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Buying a fourplex/All cash discount?

Thomas Don
Posted

So I've been reading books and I'm ready to make my first purchase in the rental market fairly soon. 

I have been considering fourplexes and have found a few in an area I think will continue to grow in the next few years. I found 2-3 all in a 490-590k price range. My favorite one is already fully occupied with rental income of 4200 total per month. The other two may be occupied but is not stated in the listing but would likely rent for about the same. 

To break down the numbers if I bought the one that is occupied at listing price-554k. Monthly payments on 20% mortgage plus property taxes(based off selling price which is $1500 per year more than the taxes paid the last two years) and home insurance comes out to 3,168 per month. It's renting 4200 per month(tenants pay all utilities) so net $1,032 net profit per month(excluding maintenance cost). 

My question is if I have the ability to make an all cash offer, how much of a discount if any could I shoot for?

Secondary question- is $250 per door decent cash flow or should I shoot higher?

Appreciate everyone thoughts and advice. If I posted this in the wrong section I apologize.

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