WOULD YOU BUY THIS MULTIFAMILY? 7 Unit Building

[Cassidy Burns]

Good Morning BP,

Just wanted to run a deal by you to see if it is something you would purchase: 

-7 Unit Building: Blue collar town of 2,000 people.  Surrounding town is 30,000 population. 

-List Price: $259,900 (going into foreclosure so very likely for cheaper purchase price but for #s sake lets use this $$$)

-Units Spread over 3 Building:

-Building 1: 4- 2 Bedroom/ 1 Bathroom 800 sq ft units ($560/month)

-Building 2: 2- 3 Bedroom/ 2 Bathroom 900 Sq ft Units ($650/month)

-Building 3: 1- Oversized 1 Bedroom/ 1 Bathroom Unit upstairs. ($620/month)  Downstairs Commercial space that was used as laundry (not currently up and running)

Gross Potential Income of : $4,160/month

Expenses:

-Landlord Pays for all Water...... (this is the value add here) Quoted $2,500 to get separately metered.

-Landlord Pays for Trash ($60/month)

-I am underwriting at 50% expenses (still waiting for final P&L)

The value add items here are : 

-Water Separately Metered

-Laundromat up an running again

-Rents are pretty much up to market rents right now and for this area, will not increase significantly.  

So question is, is this a deal that you pursue?  Cash flow is nice.  Appreciation will be low to stagnant. Rents are to market.  But Value add for laundromat and/or water.  PLUS, I do think I can get this property for around the $200,000 mark.

Would love to hear people's opinions.  If you need anymore info please let me know.

Happy Tuesday.