Looking at 1st Multiunit purchase in Oklahoma

[Gayla Kemp]

I am looking at investing in the multiunit market in Oklahoma.  I would like to know what everyone thinks about this property.  I have not walked it yet, but have done a driveby.  All information below is from the internet per the seller's statements and income statement and rent toll.  

In Millers Addition, near downtown OKC

Multiunit 4plex apartment - (total 3626 sft per county assessor)

Built in 1926 

Main entrance opens to hallway with stairwell for the upstairs apartments, all apartments have an interior door.

each apartment is 900 sft, 1bed, 1 bath

many updates have been done in the last 2 years

Not sure about updated plumbing and electric, need to find out.

4 car garage with 2 units over the garage - (1035 per county assessor)

There are a total of 6 units.

Main laundry somewhere on site, not in the units.

Owner pays trash and water bill

rental roll shows 2 short term rentals which we would probably turn into long term rentals. They are furnished apartments so need to see if the seller is selling them furnished or not.

other 4 units are as follows

#1 900 sft rented for $600 leased until 12/31/2014, moved in 12/10/13

#2 900 sft rented for $500 lease expired, moved in 11/3/2010 

#3 906 sft rented for $550 lease expired, moved in  2/1/13

#4 900 sft short term rental expires 7/22/14

#5 600 sft short term rental expires 7/23/14

#6 600 sft rented for $450 lease to 8/31/14, moved in 8/11/10

Rented units total $2100 and am thinking that #4 could rent for around $600 and #5 could rent around $500.  If so, this would be $3,200 in rental income

Expenses Total $1320

$174 per month real estate taxes

$250 per month insurance probably thru national real estate insurance group

$75 per month water

$75 per month trash

$160 per month allocated to the 5% vacancy

$267 per month property manage fee

$320 per month maintenance at $10% 

Operating expenses would be 43%

Yearly net operating income would be $22,560

Monthly cash flow would be $1880

With no loan CCR is 36.68%

List price is $325,000 but going to try to get it lowered

Need to do a loan though which really brings into question if this is a property to look at.

I can make the 20% down payment with my funds (heloc loan at 4.75%) and a gift from my parents but this will be a loan thru an LLC so a commercial loan. I do not know what the rate and terms will be on a loan like this. If this would be a stated income loan, are the figures good enough for a bank to accept? My personal bank will do the loan but it has to go to another area of the bank being this many units and he does not know the rate and terms yet. Lower units, my banker did 5% balloon at 5 years, monthly payment amortized over 5 years.

Would like your thoughts about this property and loan possibilities.  Do you think central laundry will be a major problem finding renters?  So far, my rental manager has only gone 2 weeks with no renter on another house that is now on the 3rd renter.

Thanks for the help.