Fourplex In Houston - Feedback please

[Hadar Orkibi]

Hi Team, I been presented with this "Deal" in Houston Tx. its a 4plex in an area around the universality of Houston. its lower socioeconomic area which I been told gradually been transform. 

The property is 100% occupied.

To the point, I would appreciate some feedback about the numbers. considering that the property will probably require about 15K rehab and the closing cost, the cash input is 100k. So i see the cash on cash been to low.

Please refer to the report here for the details:

https://bp-v-newproduction.s3.amazonaws.com/upload...

And Here is the listing page:

https://www.trulia.com/property/3233294900-3335-Tu...

Purchase price say $300k

Annual Operating Expenses: $8594.
This total doesn’t include the Utilities "Owner pays trash/water” — So i allow $50pm.

Please note: that I calculate NOI with including 8% for Maintenance + 8% for capex + 8% vacancy + 10% for property manager.

I also allow to spend 15k on recladding this property and replacing all Water heater and HVAC.

As you can see from the attached PDF file, the total cash needed including Down payment, Closing cost and work is 100k. The cashflow is $250pm.

From what i can see the NOI need to be close to the 1% rule for the Cash on cash to be over 10% on this deal.

Any feedback would be much appreciated, Im keen to hear (disregarding the location) at what purchase price considering the expenses and income YOU think its would be a good deal.

[Cody L.]

Originally posted by @Hadar Orkibi:

thanks @Cody L., at 190k purchase price the cash on cash would be 20%. 

The NOI on 190k is 12.6% Cap. Do you fined it achievable in today's Houston market?

Here is the amended link:

https://www.biggerpockets.com/calculators/shared/625572/b34b3bb4-97ce-43b1-a0f9-3924b70a828f

NOI is another uless metric in class C. Who's NOI? Yours? Theirs? NOI can be fudged to say anything -- and that's if you're not misleading.

If your goal is a 10 CAP property I can sell you tons based on my numbers and make a killing