Help With Multi Family Deal!

[Shawn Connors]

Hey BP,

So I got a lead today on a multi family deal I need some help with. Its a huge mansion in an A class neighborhood that was converted into a 5 unit apartment. Each unit is occupied and currently rents for $1200 which is not the full market rent. With a little updating you should be able to charge $1400. The house was recently listed for 7 months for 1.5m and did not sell. I am looking to make an offer but do not quite know how to evaluate a multi family property. I primarily deal with SFR but this may be a good deal if I can find the right offer to make. Any help would be great;y appreciated. Thanks in advance.

[Mike Wood]

I agree with @Patrick Liska.  Those rents don't support a property worth anywhere near that price.  Plus, being over 4units, your talking commerical loans so the rates are likely higher than Patrick used in his rough numbers, making it even worse.

My two family properties follow pretty close to the 1% rule, which would be the minimum I would do for multifamily.