4-plex in Raytown, MO outside Kansas City Deal Evaluation

[Aaron Gilmore]

Hello everyone,

I have a potential deal for a 4-plex in Raytown, MO about 15 min outside Kansas City. I wanted to run the numbers past everyone and see if you think its a good deal? It will be my first deal outside of primary residence. 

Asking Price is $230k

Current all four units are 2bd/1 bath with $625/unit/month.

Total income= $2500; Property tax=$240; Insurance=$150

Utilities, HOA, and Lawn/Snow = I put $0, not positive if i should put more?

Vacancy = $200 (at 8%, which seemed high, but on safe side)

Repairs = $200 (at 8%); Cap Ex didn't list any in my numbers

Property Mgmt = 250 (at 10%); Mortgage = $950

Total= $1990

Cash Flow = $510

Down Payment around $46k, closing $5k, & $8k in repairs put the numbers with $510 cashflow at a 10.37% COC ROI

Our problem is we don't have that much cash on hand to make the down payment and were looking at hard money loans. And with doing a hard money loan this deal didn't seem doable. Does anyone have any help or thoughts on these numbers? Anyone able to offer potential investing to finance the deal? I would love to chat privately with any serious options and would love any ideas or help possibly.

Thanks for all the help !!

Aaron Gilmore 

San Diego Investor

[Dan H.]

The cap ex estimate will reduce your cash flow to virtually zero. Add in that historically the rent appreciation does not exceed inflation and what you have is around $60k invested for no return. The HML will result in negative cash flow until refinanced.

If you feel so altruistic to invest $60k for no return I can think of many good charities where the money would be more beneficial.  

Good luck