Closing in a week how does this deal look? Quadplex.

[Robert Hernandez]

Hello BP!

I am closing in my First deal week and as such I am very nervous whether or not its a good deal. The unit is old ~40 years old with old HVAC 3/4 are about 13 year old and one is about 8 years old. Roof about 5 years old.

3/4 Units are occupied. But, there is one tenant who lease is due and I do not plan to renew the lease due to past history of not paying on time (the old owner helped and lowered payments). Therefore, there will be one unit that I have to put a tenant in when I own it.

Purchase price: 

Purchase Price: $212,000

Loan: 3.5% FHA Loan Morgage rate 3.3%

Mortgage/PMI/TAX/Insurance: $1350/yr

Expense: (10%/8%/8%/10%): Vacancy, Capex, Repair, Property manager: $1080

Utilities: Electric and Water is tenant paid

Rents: $650, $650, $700, $700   -= $2800

Cash Flow: $370/month 

Cash Flow (10% expense):  $280

Cash at Closing: 8.5K (6K paid by seller)

The home is in a C class neighborhood, not the best there are some section 8. But, relatively quiet, not the worst place. Being that this is my first deal I am very nervous. My cash flow is pretty low since I was conservative with the numbers. But If i'm less conservative of course I can get close to $500/month if I do like (Repair 6%, Vacancy 8%, Capex 8%, PM 10%)

I would be living in one of the units, but i'll count my payment towards the income. 

I'm worried that I am "Overpaying" by paying market price for something that requires alot of potential CAPEX expenditures. Nearby Comps sold for around 205, 207, 220.

The appraisal came at my purchase price. I'm concerned about a downturn and this property isn't worth much. The seller is buying a homewarranty so that gives a little confort. But, I can't help but feel like this is a bad deal. I'm worried about vacancy too. The community has like 7 Zillow ads for rent around my area. The community is a quadplex market with a like 20 in the subdivision. A lot of which have been on the market from 1-2 months. 

Any Thoughts?