First Non-Owner Occ 4-Plex Analysis!

[Lindsey Iskierka]

Hi Investors! 

I wanted to reach out to the BP community and see if anyone could help me analyze this potential deal my husband and I have.  

It's a 4-plex that is fully occupied just minutes away from a large university and lake. All units are 2 bed/1 bath; 3 are rented for $725/month and 1 is rented for $700/month (long term tenant).

Asking price is $259,000 and has been on the market for 200 days.

Below are the current yearly expenses according to the seller:

Property Taxes: $3,524.00

Garbage: $840.49

Electricity (owners portion, tenants pay their own): $419.76

Water and Gas: $4,699.75

Total Operating Expenses $9,454.00/year

Here's the income:

Unit 1: 2br/1ba $700

Unit 2: 2br/1ba $725

Unit 3: 2br/1ba $725

Unit 4: 2br/1ba $725

Laundry (coin operated in building) $480.00/year

=$2,875/month rental income x 12 = $34,500/year + $480 laundry = $34,980.

My husband and I are trying to figure out if we could do a 5% down conventional loan (apparently they're still available?) Or if we should do 25% down (required for 2-4 units) and do a private or hard/money loan for the $65,000 ( about $63,000 down payment plus closing costs) and pay it back with interest over 5-7 years.

From our calculations, a 25% down conventional loan would cash flow anywhere from $800-$1000/month depending on final purchase price, interest rate, expenses, etc.

Most likely would try to lock in the property between $220,000-$240,000 for it to make sense for us.  

Are these numbers showing a potential deal? Or are we missing something big (besides insurance and PM) that we need to consider that could kill the deal?