Is this Potential QuadPlex in Philly a Good Deal?

[Abel Rodriguez]

Hello BP!

I am looking to get into a deal but do not know if I am missing something or worse am moving too slowly on a potential bargain in Philadelphia. A friend is thinking of selling their Quadplex and I heard it could be as low as 325k.

I want to owner occupy a multifamily and thought this might work.

325k Quadplex in an awful school district but low crime lower North East section of Philadelphia

Income:

Unit A: 1 Bedroom $700 (Unoccupied) Currently Under Renovation

Unit B: 1 Bedroom $650 (Occupied)

Unit C: 1 Bedroom $650 (Occupied)

Unit D: 1 Bedroom Efficiency $500 (Occupied)

Detached Garage A: $150 (Unoccupied)

Detached Garage B: $150 (Unoccupied)

Total $2800

Expenses:

1.4% tax on 200k assessed value: $2800/yr -> $233

5% Vacancy -> $140

3% Repairs -> $84

7% Cap Ex -> $196 (Older Property built ~1930)

5% Prop Mng -> $140

Insurance -> $135

FHA Mortagage -> $1,368

MIP -> $230

Total: $2,526

Cash Flow: $274

CoC Return: 12%

I would love to hear any comments, warnings, or questions I should ask the owner.

I am unsure if I am looking at the whole picture? Is there a better way to estimate costs like repairs or Cap ex instead of a percent of rent that seems arbitrary to me?

Any and all insight is appreciated thank you BP you are an awesome community!