$40,000 to invest, advice please!

[AJ Felix]

Hi Bigger Pockets,

I am newbie investor looking to get started in the Baton Rouge, Louisiana region or Conroe Texas region. I have $40,000 to devote to investing and looking to make a start in multi-family 2-4 unit niche with a buy and hold strategy. While I am reading and continuing to learn I do not know what a good deal looks like. Can someone illustrate what a good or home run deal on a multi-family property looks like? Also, what would be a way you would best utilize the investment money if you were just starting out again in the mf niche? 

is this a realistic home run deal: Duplex cost $80,000, ARV $90,000, %25 down payment ($20,000), rehab costs $10,000, closing/other costs $5,000, Total all in costs $35,000, rent $150 per door x 2 =$300 monthly, $3,600/$35,000=10.3% ROI

[Marco Santarelli]

@AJ Felix — Congratulations on working on your first multi family deal.

Assuming the $300 per month is a true net cash flow number, then the numbers on the surface look good. Be sure you’re penciling in vacancy and maintenance to get a true cash flow representation.

One of the biggest variables quite often overlooked by investors is the neighborhood the property lives in. You can’t change that. Be sure that meets your criteria, whatever that is.

For me, a typical deal would have to be a minimum of a B class neighborhood. But I do have a range that I work within depending on my investment goals at the time.

What is the gross rental income on that property right now?

Continued success!