My First Deal 4 Plex in Phoenix

[Anthony Gayden]

Well my first deal is done. I am the proud owner of a 4 plex in Phoenix, AZ. Before I go into the details with the numbers, I should tell you about my goals. I want to get into commercial multi-family real estate investing. I knew from the beginning that multi-family is where I wanted to work.

Phoenix, AZ, 4 - 2 bedroom/1 bathroom 800 sq. ft. units. Built in 1984, single level, well maintained and completely remodeled a few years ago.

Purchase Price $179,000

Down payment $45,500

Closing Costs $4965

Gross Annual Income $24,600

Vacancy Loss 10% $2460

Adjusted Gross Income $22,140

Property Mgmt. 8% $1771

Maintenance/Supplies $1064 (calculated using the average of actual numbers from 2011,2012,2013)

Water/Utilities $2458 (calculated using the average of actual numbers from 2011,2012,2013)

Annual Mortgage $9865 (includes insurance and taxes in payment)

Estimated Total Annual Expenses $17,618 (mortgage/taxes/insurance, vacancy loss, maintenance, property management, utilities)

Estimated Annual Income $6982

Cash on Cash Return 13.8%

[Scott E.]

Wow @Kimberly T. , very impressive analysis!! I would have never guess that you haven't actually lived in the valley :)

I tend to agree with what you've posted. Generally speaking, if I were to buy a multi family out here it would be in:

-Tempe

-South Scottsdale

-East Mesa

-Some of the historic districts in downtown

Now there are some exceptions to that, and again that is just where my level of comfort lies. The 68th strip you speak of is an interesting area that I'm very familiar with. In fact, I lived right off 68th street and Indian School for many years. In that area, I would avoid west of 68th street, but be all over east of 68th street. It's a dynamic I've never seen but that road is literally a divide between good and bad(until you're north of Osborn, where everything gets better).

The square in northern phoenix you speak of - Not somewhere I would feel comfortable investing either.