4 plex in Tucson

[Anthony Gayden]

I asked a similar question a few months back with regards to a 4 plex that I was considering buying in Glendale, AZ. Well this time, the property is in Tucson, AZ and I intend on owner occupying it and self managing. I did all the figures though based on if I wasn't living there.

Tucson, AZ

4 (1 unit owner occupied) - 2 bedroom/1 bathroom 900 sq. ft. units. Built in 1981, two floors, completely remodeled in 2013/2014. Currently unoccupied. Foreclosure. Monthly rents are based on comps in the area at $500/month.

Offer Price $145,000

Down payment $5075 (3.5% FHA loan)

Closing Costs $5000

Gross Annual Income $18,000

Vacancy Loss 10% $1800

Adjusted Gross Income $16,200

Property Mgmt: Self Managed $0

Maintenance/Supplies $1500 (estimate based on $500 per unit)

Water/Utilities $2160 (estimate based on $60 per month per unit)

Annual Mortgage $11,016 (includes insurance, taxes, and PMI in payment)

Estimated Total Annual Expenses $14,676 (mortgage/taxes/insurance/PMI, vacancy loss, maintenance, property management, utilities)

Estimated Annual Income $1884

Cash on Cash Return 18.7%

Of course I would want to refinance in a couple of years to get rid of the PMI. Also I am strongly considering sub metering the water. It would be easy to do since the place is currently unoccupied. Also all the units have washer/dryer hookups, so I may add those in so I can get a little bit higher rent.