4plex deal analysis help

[DJ Cummins]

Happy Friday Eve Everyone!
Tell me how this one looks. Do you think I should try and offer lower than the 95k asking price? Obviously I was planning on offering a bit less, but not sure if the numbers would require an even lower offer. Just wanted some opinions if possible.
4 unit, renting for $1700.00 per month. Asking price, 95k. 19k down payment debt service = 78k
20 year ARM, 4.25%. taxes 2800.00. Insurance 1000.00. total PITIA payment = 799.66. Call it $800.00

Rental income = 1700.00
Debt service = 800.00
8% vacancy = 136
5% CapEx = 85.00
10% prop mgmt = 170.00(not using for now)
5% water/trash/misc = 85.00
Cash Flow = 424.00

BTW-i have only driven by the property, i am walking thru on Saturday. Just trying to get some numbers and thoughts in my head in case that i like it. Thank you as always!

[Jeff G.]

Alright, a few things here:

• First off, don't forget to add property tax into the mix.
• It would be helpful to break down the building into unit size / rents. So, 750 sq. ft. 2/1 at $850/mo. Do that for all 4 units. Then go over to rentometer and see if you're getting approximately median rent for the area: https://www.rentometer.com/. If you are, great, if not, you're going to want to increase rent.
• What is the parking situation? I can't tell you how many multifamily homes I've passed on because the parking situation was bad.
• Look at a crime map (Zillow or Trulia, I forget which) and see if there are significant amounts of violent crime or property crime.
• When you take a look at the insides... make sure you're dealing with hardwood or laminate. If the units have carpet work in the cost of replacing it with laminate into your budget every time a tenant turns over.

Class C areas and "central air" do NOT mix! Eventually it will get stolen, vandalized, or stripped for copper and the proceeds will fund someone's habbit. 

About Expenses:

• Vacancies: Assume TWO units will be vacant for two months per year. I don't care what the local stats say on citydata. Just do that.
• Upkeep: Assume you'll be paying 35% of your property income AFTER debt service and taxation. Why? 10% for property management, 20% for repairs, and 5% odd's 'n ends.
• Utilities: Are the utilities in the property owner's name or the tenants? That's a BIG deal if it's in your name. If that's the case, look into sub-metering.