Multi-family Analysis HELP

[LaRhonda M]

Hey guys,

Question I am still fairly new to real estate investing. I have a deal on the table for a Quadraplex in a class C Neighborhood in Macon, Ga. With multifamily units I am having a bit of a hard time finding how to value them and if it would be a good deal or not. So, wanted to run the numbers by you guys and get your thoughts.

The asking price is $85K. The Quadraplex is currently being ½ rented with 2 units at $450 Each – The average rent in the area is approximately ~$650. The neighborhood is really run down so I don’t know how close to average I’d be able to get. On the HIGH end I’d be looking at ~$10K to get the other units “rent ready”, and $15K – $20K if I really wanted to improve the complex nicely.

This will be a cash purchase. So great cashflow if I decided to own free and clear. I'd be interested in using the BRRRR strategy and refinancing and pulling some money back out to leverage, but I am having trouble determining what the ARV would be for quad after rehab of the property as there are no other quad or multifamily dwellings nearby to compare it to.

Would love to hear your thoughts, feedback, advice!!

Thanks guys!!!

[Whitney Hutten]

@LaRhonda M How exciting! Sounds like there are some great numbers here.  My concern is you mentioned that the neighborhood is run down and you are paying all cash.  You can't move the property when you close.  And just because you rehab it nicely, doesn't mean you will get a high-quality tenant.  I challenge is your all-cash investment will be preserved over the long run.  Is the neighborhood coming back?  Does the city have plans to make improvements in the next 5 years?  Would you be in the path of progress?  If yes, to this questions... then maybe.  Just my two cents.