Practicing Analysis on 4-Family Foreclosure, Beast or Bust?

[Adam Rothweiler]

Hi BP community,

I'm struggling to understand why this deal screams so loudly at me.  Hesitancy has gotten the better of me and I'm surely missing something in my analysis here (<-- hyperlink to report).  It's a foreclosure property in a B-C neighborhood.  4-family, total rent roll of $2770 (1 unit section 8), foreclosure valuation of $64k.  I feel as though I covered most of the bases, I just want to find out from you all what I could possibly be missing or not thinking to consider.  I even increased the vacancy to 20% because the neighborhood average vacancy is a whopping 24%.  Could you wonderful guys and gals give this a once over and let me know if there's something I'm missing the mark on?  I would love to know if this actually is a diamond in the rough or if it's a bust.  

[Donald S.]

If you're familiar with Dutchtown, and have the reserves to cover unexpected repairs, and the guts to deal with tenants while you clean the place up, I'd say go for it. I will say how is the owner getting 2770/mo in rent for dutchtown though? That's avg 692, when dutchtown 1/1 goes for 500ish. Are these 3/1? 

I will also note that your garbage will be 14 per unit per month, so 56. And the city requires water and sewer in the landlord name for multi, I doubt you'd be able to bill back as no one else does. You're probably looking at 160/mo for that. Still looks good though, just will require verification of revenue and proper management. If you want to get together and have coffee to discuss more shoot me a pm.