My Second 4 Plex (owner occupied)

[Anthony Gayden]

Here we go. I have this property under contract, and just had the inspection today. I plan on moving into one of the units and living for free. I ran all of the numbers as though I wasn't living there to give me an idea what to expect in a few years. The guy I am buying it from has owned it since 1991, and it is in good shape.

Tucson, AZ

4 - 2 bedroom/1 bathroom 800 sq. ft. units. Built in 1986, two single floor buildings. Currently fully occupied. Monthly rents are at $600/month.

Price $152,000

Down payment $5320 (3.5% FHA loan)

Closing Costs $5866 (Bank of America closing cost calc.)

Gross Annual Income $28,800

Vacancy Loss 10% $2880

Adjusted Gross Income $25,920

Property Mgmt: $1944 (7.5%)

Maintenance/Supplies $2592 (estimate based on 10% adjusted gross income)

Water/Utilities $0 (tenants pay all utilities including water/sewer/trash)

Annual Mortgage $12,036 (includes insurance, taxes, and PMI in payment)

Estimated Total Annual Expenses $19,217 (mortgage/taxes/insurance/PMI, vacancy loss, maintenance, property management)

Estimated Annual Income $6708

Estimated Cap Rate 12.33%