4 Plex 1 hour away from my home

[Ryan Green]

well, just seeing what you guys thing about this deal. 

4 plex Currently being leased

2 units are 2/1 s   $800

2 units are 1/1 sn $600

Sales Price is at 187,000

all tenants are month to month

The current owner is elderly and getting out of the rental game. She does not have records and has not had leases on the units. 

The property is about an hour and 15 min away from my home in a smaller town in Texas. As i look at these basic numbers i see that it has the possibility of cash flowing after 50% expenses. Just wondering if anyone has any experience of their rentals being out of their home market. I only work about 20 hours a week so i have time, when needed, to manage the building. 

I will be looking at the property this week and scheduling an inspection so will have some more info soon.

[Mike B.]

@Ryan Green - I would first determine if the deal is good.  What are the comps (sales and rentals) in the area, etc.  Does it need renovation, etc.?  If so, how much.  Maybe you'll get a great deal on the building, do some minor rehab and be able to get tenants on 1-2 year leases paying you more then the current owner.  Likely so, based on similar stories in my area (month to month, owner wants to quit, etc).  

If I'm reading your post correctly, as is currently, you would be collecting (gross) $2800/month in rent or 33,600 annually. I agree with your 50% number based on some quick calculations I just ran.

In terms of your concern with it being "out of your market".  My advice would be, after analyzing the deal, if it is a good-great deal, then buy it and "master that market".  See what others are doing in their rentals (in terms of finishes, etc) and meet or exceed those expectations of renters.  I've done this with 3 properties now and I always get multiple qualified applicants, willing to pay slightly more to me (vs. another landlord) because of the service and quality product I deliver.  This includes in a recent "out of market" area that I spent some time driving and walking around the neighborhood/area, analzying data online of shopping/conveniences near properties, comps, etc. 

Who knows.. maybe this area will become a great area to invest in.