Help with evaluation of a 4 plex

[Christopher Hunter]

Hello Biggepockets,

Here are the particulars: Asking Price $295,000

4 plex, 8 bd/8b, 4,000

electric no gas

rent $3,000

water bill $70

trash $152.92

sewer $52.93

taxes $1537.78 annual

security lights $32

My GRM is at an 8 and running my calculations I should come up with $288,000 valuation. If seller is willing to negotiate to get $288K or below, does this pencil as a good investment?

Thank you ahead of time for your response

[Daria B.]

@Christopher Hunter

I ran your numbers through my deal check app and came up with the following. Yours compares to a quad I am looking at with the exception of taxes that are higher than yours.

I added 10% fees for PM, 10% for R&M and CapEx. Also, assuming 25% down with a 30 term at 5% interest. You didn't say what your financials were so I assumed what seems the usual.

What are you looking for in returns?

I've set my minimum for a quad to $200 per unit after all expenses and mortgage payment.

4plex Property Report:

Address: 4plex, USA,

Beds/Baths: 8 / 8

Type: Multi-Family

** Purchase **

Purchase Price: $288,000 ($0/sq ft)

Purchase Costs: $8,640

Rehab Costs: $0

** Financing **

Down Payment: $72,000 (25%)

Mortgage Amount: $216,000

Total Cash Needed: $80,640

** Cash Flow (Monthly) **

Rent: $3,000

Vacancy: -$249 (8.3%)

Expenses: -$1,318

Net Operating Income: = $1,433

Mortgage Payment: -$1,160

Cash Flow: = $273

** Returns **

Cap Rate: 6%

Cash on Cash: 4.1%

Return on Investment: -3%

Internal Rate of Return: 8%

Rent to Price: 1%

Gross Rent Multiplier: 8

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