Evaluating this Deal

[Nicolas J Martin]

Hello guys! I am super new about this real estate stuff so I will not be offended if you really...really dumb it down for me.

I am considering this 4-unit multi-family. It has been on the market for 181 days as of 12/4/2020 (Photo Below). The asking price is $90,000. In the description of the property on Zillow, it says: 

"Fantastic Investment Opportunity. Great ROI. Four One Bedroom Units Ranch. As-IS Sale and buyer to assume any city inspection requirements. 475/unit rents"

I am assuming the last part about inspection requirements means that it might have failed an inspection and thus is not able to get the certificate of occupancy. I used some of the feedback that I've seen on here to outline my potential deal. 

I am making the following assumptions

1. The property will need work to get it up to code. I am assuming $20,000

2. I can get the property at 80% of the asking price

3. It will continue to rent for at least the $475 that it is currently renting at

4. I am assuming that there is an ARV of $120,000. There is a similar property (The picture is in the Excel Document) that is Selling for $120,000. There have been other properties in the area that have sold for over $100,000 (not a detail to be caught up on, I am more interested in Cash on Cash return.

Based on these assumptions, I am considering the following:

A. Use a hard money lender to borrow $95,600 that I would need for this property

B. Offer 80% of the asking price, $72,000

C. Use $20,000 to get the property up to rentable standards

D. After 1 year, lock in a 30-year conventional loan 

E. Pay back the hard money lender 

If my calculations are correct, this property will have a net cash flow of $599. Right now, I think this is a good deal. I would love to borrow your wisdom so that I can sharpen my instincts on finding deals. Let me know if anything needs to be clarified.

Thanks in advance!

Nicolas