Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 9 years ago on . Most recent reply

User Stats

65
Posts
14
Votes
Devin Scott
  • Investor
  • Milton, DE
14
Votes |
65
Posts

Help Analyzing a 4plex

Devin Scott
  • Investor
  • Milton, DE
Posted

I am looking to buy this 4 plex. Am i missing anything with my numbers? How does everyone feel about the offer price? There are no comps in the area for a 4plex. 

Asking price: $159,900

Offer price:$130,000 w/ seller holding note for 20%

Gross Rent: $2200

Cap X: 220

Maintenance: 220

Vacancy: 220

PM: 220

Tax and Ins: 150

Debt Service: about $700/mo based on 5% interest on $130,000

My intent would be to offer $130,000 and have seller hold a loan for 20% of that. I would get 80% loan(from someplace yet to be determined.)

Cashflow: $470

The 4 units are rented. I have no due diligence yet on any rehab costs. I know that it is at least rentable since all 4 units are rented. The outside seems fine, with no noticable repairs.  

Any advice is appreciated. 

Most Popular Reply

User Stats

172
Posts
73
Votes
Aaron Thivierge
  • Investor
  • Jacksonville, FL
73
Votes |
172
Posts
Aaron Thivierge
  • Investor
  • Jacksonville, FL
Replied

Lots of thoughts on this (and I don't mean to offend, just offer my insight): 


Where is the "other" 80% coming from?  You have no skin in the game.  You are borrowing money from the seller to show the bank you have a down payment, and you are borrowing money from the bank to pay the seller.  This is not conventional nor creative. 
 
Your property taxes and insurance allocation looks underestimated.  I would use your local tax estimator or tax records to review the actual tax figure/ year AND call your insurance company for an actual quote on insurance for the year. 

I plugged all your given numbers (though they should be verified) into the BP buy and hold calculator, and that 4plex property will cash flow $94.57/ month divided by 4: so each unit should yield you $23.64/ month in cash flow. 
I assumed you'd be paying back the seller carried 20% ($26,000) at 5% for 5 years with a payment of $253/ month.   
Have you looked into a FHA loan on primary occupancy dwelling (duplex, triplex, quadplex). But, don't forget about your reserves, repairs initially to get rent ready the other units.

My interpretation is this deal is a poor choice unless there are other variables not mentioned.  

Loading replies...