Owner-Occupied 4 Plex - Please Check My Numbers

[Brandon Justice]

Just passed the 2 year mark of living in our current condo and about to move into the vacant unit of a 4 plex back in the state we grew up in. I probably should've made this post prior to purchasing but as they say, the next best time to plant a tree is today. Please check my numbers and let me know how we did and maybe what specifically is good, bad, and potentially concerning. Thank you!

Building Details:

- 2 on bottom 2 on top - 3/1.5 ba 1100sqft - 7 yr roof - prob $35k - 50k total work/updates to make awesome.
- Neighborhood ~ C- but a C- area here doesn't mean too much, smallish town ~ only about 50k people

Purchase Price: $660,000

Appraised Value at Purchase: $730,000

Interest Rate: 6.625% - 30 year fixed

Down Payment: 10% / $66,000

Cost to Make Rent Ready: $14,000

P&I - $3803 T&I - $898

Total PITI - $4701/mo

CapEx, Vacancy, Maintenance - $1099/mo

Total Monthly Costs - $5800/mo

Current Rents - $3800 (3 units)

Fair Rents ~ $5000 but will likely only charge ~ $4500 to start. We don't want a lot of turnover right away and since we're living there we want to try and keep the peace. Slight increases will happen though to get up to about $4500. Max we could get after renovations to 2 of the units would be about $1800-$2000/mo. The other 2 are already updated.

Please let me know if I should provide anything else and thank you in advance for any wisdom you can provide.

[Melanie P.]

The numbers are not great but they are fine. You do not need to worry about raising rents when you live there. Moving is expensive and regular, incremental rent increases at lease renewal are expected and necessary to keep up with your operating costs. 

I recommend not telling the tenants at that property that you own it. If they already know tell them you sold the majority interest to a partner who is letting you live there. You need a reason not to make decisions on the spot with people. You don't want to be unloading your groceries and have someone come up to you about pets, neighbors, miniblinds, etc.