Thinking of buying a fourplex...deal analysis

[Linda Forrest]

Hi everyone!

I am considering buying a fourplex in Dallas area, asking price is 300k, all units are currently occupied in a good condition. Rents currently total 2900 a month but could reach 3600 by looking into the other comparable units around. If i use a HML with 7.5% and 2 points. He is willing to fund 75% of the deal the rest is on me. Please let me know your thoughts whether this sounds like a deal or not. Thank you!

[Michele B.]

I am confused on the numbers that others are running.....

Please tell me the numbers straight

selling price 300k

mortgage  225,000

insurance ???

taxes    ????

garbage ???
electric   ??? 

Heat ????

miscellaneous ????

length of the loan with hard money ???

Percentage rate 7.5  Correct?

I am not seeing this as a negative cash flow

It is a huge down payment 75k

It will cash flow if the loan is for 20 years or longer

You would not be able to use that 75 k anywhere else. so time value of money I would say is not great but it equity. 

Please tag me with your responses so I can redo these numbers and make sure I am correct.