Deal or no Deal? Analysis Help Please!!

[Kole Kingslien]

Alright guys, I was hoping you could give me some help on weather you think this is a good analysis or not, I am looking at a 4 Unit in Madison, and it would be my first purchase. Here are the details:

Purchase Price: 310,000

Down Payment: 15,500

Property Inspection: 500

Closing Costs: 4000

Monthly Expenses:

Water/Sewer: 200

Maintenance/Repairs: 200

Vacancy: 150

Cap Ex: 150

Misc: 100

Property Tax: (5500/yr) 459

Insurance: (1200/yr) 100

PMI: 205

Mortgage: 1389

Total: 2953

Rental Income: 3000

Alright, so do you guys think this is a good deal, and a good analysis? My problem is that the rents are under market value for the area, they should be at 3300. Also, how do I go about raising rents up to market value after taking possession (if I choose to buy it)? Is it legal to raise rents right away? The tenants are all on a year lease. The places are in good structural condition, but the units are messy and need some updates in the future (new flooring, cleaning, paint jobs, and a couple new bath tubs), its in a low income area. I eventually want to get the units looking nice, and new renters in there. Also we will be getting an FHA loan, and putting 5% down, so we will be living in it (I did my analysis as if we were renting out all 4 units, for when we move out) Any thoughts, comments, or advice?

I'm worried about not being able to find a deal, this is pretty cheap compared to what I've been seeing in regards to 4 units. How much waiting should I do before making my first purchase?

All input is appreciated, Thanks,

Kole