Questions on evaluating multi-family

[Courtney M.]

Hi, I happened to see a multifamily property come up in my husband's old neighborhood. I find it intriguing for a couple of reasons and wanted some input on how you would go about evaluating a deal like this.

It's essentially 5 duplexes at $776,000. The listing notes the owner will finance on a land contract over 20 years with $100k down. The listing also specifically states he doesn't want a realtor/broker.

Per the listing, gross rent is at about $98,000. He lists the expenses for the new owner in year one, which includes mortgage payment, insurance and property taxes at about $57,000. Of course that number doesn't account for property management or opex. There are 5 roofs, after all, and the properties were built in 1995. The project is currently 100% leased (rates per unit are not listed). Cap rate on the listing is 8.73%. I will be in the area in a few weeks so I was thinking of going to take a look.

In this scenario, with the limited information, how would you evaluate this deal and structure an offer? Running some quick math, it looks like each unit is renting at $823ish. Quickly running searches on Zillow, this looks to be about right, maybe just slightly under. Listing also notes tenants are paying all utilities and all have a washer/dryer in unit.

With this limited information, is this a "deal" you would be interested in? What would be your process? I've never even put in an offer on multifamily, let alone one without a broker, so I'm trying to figure out what the initial steps might be to better qualify this deal.

Of note - this isn't a growing population area. It's more of a smaller rural area but as a result, there aren't a lot of rental properties on the market. It's definitely another area I'd want to dig into before going further.