Evaluating deal on 4-plex

[Jonathan Newman]

What are your thoughts on this deal?

It's got 4 1br/1ba units. Comparable rents in the area are $350-390, some including partial utilities.

Asking price is $29k and it needs "about" $25k in repairs, which can be purchased along with the property.

The repairs include all new entry doors, new PEX plumbing, new vinyl windows, new kitchen cabinets and countertops, electrical upgrades with new fixtures, new toilets, new tubs, new vanities, painting, drywall work, new vinyl tile in kitchens and baths, and new carpet.

The listing says it should rent for $400/month, but I'm not sure I buy that from a sellers agent.

If I finance $55k, 7%, 30yrs, I pay $365/mo. With gross rents of $1400-$1560, the 50% rule puts my NOI at $700-$780. Do partial utilities factor into the 50% operating expenses?

With a $55k purchase price, the 2% rule asks for $1100 gross rent, which this meets.

Second question,
If this were your first rehab, would you consider living in it after rehab as the "property manager"? or would you look for something in a different part of town? This is in "flyover country" Ohio.

Thanks for commenting,
Jonathan