Would you do this deal?

[Solomon Fulop]

Calculated Numbers (4-unit)

Helloooooooo bigger pockets multi-family investors! 

I am looking for a quick sanity check as I'm going to have to make a decision on this within the next 24ish hours.  This would be my first deal ever and I'm hoping it will lay the foundation for me to be able to start marketing more and acquiring more investment properties.

These numbers are extremely conservative in general and the ARV is without putting any money into kitchens and bathrooms which will probably need work down the line, but as rentals I don't see a need as they are in good enough shape. The rents are currently at 600, 600, and 550 which are severely below market. I've been quite conservative in running my numbers with a max rent of 800/800/500 (I would live in the 4th unit), but median rents are 1,100 where I live and this is in a really good walkable location.

The electrical is rough (knob and tube) and although I plan to bring it up to code I don't plan to rip into the walls until I have a few years of income to do some remodels.  The roof has about 5-7 years still left on it and is JUST showing signs of wear.  I have budgeted 30% of the rental income ($2100) to be put away in a separate account for these kinds of repairs. At the end of the day, I will keep 550/$600 in my pocket by putting $650 a month into a repair fund, and then freeing up about $550 to grow my business.  

Bigger pockets, would you do this deal?

Thank you all in advance for your responses!

[Marjeanne Fields]

Make sure your insurance will cover you with the knob and tube. Get an estimate from them as I anticipate it might be higher than you think. 

How are you getting 100% loan with only 2% interest? That is a huge red flag to me. 

In your analysis over time you have not accounted for the roof. Nor does it look like you have accounted for the electrical. I think your expenses are just too low. 

Your Cash on Cash goes down in year 15. Why?

Overall- I would not buy this property based on your underwriting. I just think you need better underwriting here is all. 

Hope that helps though. Good luck!