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Updated almost 8 years ago,
First quadplex advice
I'm a very new investor currently in a hot market hoping for some experienced advice on my first deal. Hopefully I found the right place!
THE STORY:
For the past year I've been working as much as possible and saving every dime I can while searching for a multi-family property in the hopes of using the house hacking strategy. I was sent an off market deal by an agent that specializes in multifamily properties a couple days ago, ran a quick analysis, as I've learned to do through this website, and found it to be worth perusing. I went ahead and submitted an offer with several contingencies in place to back out if I find anything crazy of course.
THE ANALYSIS:
4plex-540K
20K down
INCOME:
Unit 1- $1025
Unit 2- $1025
Unit 3- $1000 **ALL UNITS 3bd 1 Bath and have an attached garage
Unit 4- $1000
TOTAL-- $4050/mo
EXPENSES:
FHA LOAN: 3609.15 per month
FHA Includes: annual taxes and insurance
taxes: $5522
Insurance: $1300
MAINTAINENCE: $1000/yr
UTILITES: $5600/yr
TOTAL: $550/mo
TOTAL EXPENSES: $ 4159/mo
CURRENT MONTHLY CASHFLOW: $4050 - $4160 = **$-130**
THE VALUE:
The cheapest similar units I've found in the area are around $1300. I believe at minimum I can get the rents up to $1400 as similar units on the very same street are renting $1500 -$1600 for 3 bed 1 bath and no garage. The current owner is absentee and apparently is tired of managing it from a distance. They've owned it since 2001 and don't seem to have kept up with market rental rates.
My current rent is 1100, so moving into one of the 1000 dollar units would only increase my monthly expenses by $30 because of the negative cashflow. Not a big deal to me at all for starting out.
THE QUESTION:
I just don't know what else to consider. Is there anything else I may not be foreseeing about this deal that could make it too good to be true? If anymore info is required please let me know!
Your time and help are much appreciated!!