First Deal - 4 Plex?

[Justin Howe]

Hey everyone,

I found a 4 plex and want your input on the deal. This will be my first investment property. I own a SFR that is three miles away so it would be easier to self-manage. For calculations, I included management expense but I plan to self manage.

4 plex, 8 units, 2 bed/1 bath, 3200 sq ft

Built in 1979. New flooring and cabinets in 2009

Purchase price: $194,000

Down payment: $40,000

30 year mortgage at 5% - 20% down

Income

Rental income: $25,920

Expenses

Property taxes: $1,000 annually

Insurance: $1,000 annually (guess)

Property management: (6% of rent) $1,560 annually

Maintenance/repairs: (6% or rent) $1,560 annually

Utilities: $2,100 annually (water/trash)

Mortgage: $12,348 annually 

Total Expenses: $19,568 

Net Income: $6,352

Cash flow: $530 monthly

Also should I use my heloc or cash for the down payment?

Thank you for all of your help in advance,

Justin