What would be a reasonable offer for a this buy and hold?

[Breann Nelson]

I have been analyzing a four-plex that I am interested in purchasing in Pharr, Tx. Each unit has 2 bed 2 bath and currently being rented for $600 each per month. The taxes are $6012.9 this year, I estimate property insurance at $2000. I would either use private money to purchase it cash and in six months get a home equity loan and pay off the private money investor or purchase it with a FHA loan and house hack it. The listing price is at 260k. At that price there is no way it is income producing nor can it pay for it self at that price per month. I have been using the four square method for analyzing rental properties and the only way I can come up with a positive cash on cash return is offering 150K but all four units are occupied and there fore I can not hack the house and still be in the positive cash on cash return. The property was built in 2008 and each unit has 1,066 sqft., carport with two car spaces per unit. I would ultimately raise the rent to $650 per unit upon taking ownership to all the current tenants and work my way up to $750 at $50 increments per year at contract renewal. I would charge any new tenant that would enter $750.

For now at it's current value based on the total monthly income, what would you say would be a reasonable offer? In the expense quadrant I was currently calculating $40 for lawn care, 10% vacancy, 5% repairs, 8% CapEx, taxes 501.08, insurance 166.67, and mortgage P&I $777.05 and this equals $2324.8 if I offer 150K. If my total initial cash investment is $19,250. I am at approximately 4.69% cash on cash return. This property is located on the MLS so maybe that is why it is so over priced. It has been on the market for 359 days. I am open to any and all suggestions and recommendations. This would be my first investment property to acquire. I have been stuck in analysis paralysis so I would appreciate any feedback. Thank you everyone on BP.