Quad in Georgia

[Darryl Blalock]

Hi Guys,  I'm new to this and could really use some expert advice.

We found an owner-occupied quad listed at $275K. Nice clean building in a nice clean area.  The other 3 units have long-term renters, and a new tenant is moving in to the previous owner unit.  All are month-to-month tenants. All electric units, tenants pay own utilities. Trash is included in property taxes. All appliances are less than 8 years old, but the roof will need replacing in 7-8 years.  Last year's rents were $21,300. I'm planning on using a property management service.

Got preapproved for a 4.125%, 30 yr conventional with 25% down.  I don't have that kind of liquid cash, so I'll have to take out an equity loan on my primary residence. Not excited.

I ran the BP calculator, plugging in numbers as best I know, and my Cap Rate is about 6.75%. My CoC ROI is a little over 9%.

My lender seems to think that the unit is a little undervalued (elderly widow seller- wants to get out and travel), and that I may be able to cash-out refi in 6-12 months, recouping my initial investment. Is this reasonable?

We did submit an offer at $250K with a couple of escape hatches written in- waiting on word.

OK - what am I overlooking?  Is this feeling I have just first-time jitters, or is there something that's gonna bite me? I really want to do the first one right.

I sincerely appreciate any and ALL advice!

DB