What is the most you would pay for this property?

[Cory Anderson]

Hey guys,

I am looking to buy my first multifamily and am in need of some advice. Below are the numbers on a 4-plex that I went to look at yesterday. The asking price is more than I am willing to pay based on my numbers but I would like a place to start negotiating due to the fact that I think the property has lots of potential.

Asking Price: $249,000

Estimated Repairs: $0 currently however, 3 of the 4 air conditioning units plus a couple of the hot water heaters are worn. They may last 3 more years, they may last 3 months...

Down Payment: 20% on a 30 year mortgage

Current Monthly Cash flow: $2500 however, I have done my research and there are 7 other similar duplexes on the same street and based on their rents there is no reason this place should not cash flow $2800/month with a 95% occupancy.

Below are the estimated monthly expenses minus the mortgage payment:

Vacancy	$208.25
CapEx	$125.00
Management	$250.00
Property taxes	$220.00
Garbage	$34.00
Lawn Care	$60.00
Repairs	$150.00
Insurance	$90.00

The 4-plex has 3 of the 4 units rented at the moment due to the fact that the 4th unit was recently updated and is left open for showings. It is all brick with a good roof and has been very well taken care of. It is a turnkey 4-plex but as previously mentioned could need some updates in the near future. If you have any questions please ask and I really appreciate you taking the time to read my post and give me a little insight as I learn how to properly analyze properties.

Thanks,

Cory