4-Plex Analysis - Your Thoughts?

[Account Closed]

Hi BP community! 

This deal is on the MLS - 3108 W Palmira Ave Tampa FL

Property Highlights:

-Great location (A- area of town, Hyde Park/Palma Ceia)

-4, 1 unit apartments at 550 SF each 

-Asking $260k or $65k per unit

-Rents in the area are $750-$950 for 1BR

$38,400 Gross Rents

$7,000 Utilities

$3,840 Property Management

$1,800 Vacancy

$4,000 Capex

$5,200 Taxes

$2,500 Insurance

$14,000 NOI, 5.5 cap

Principal/Interest is $12,000 @ 10% down

Levered Cash Flow $2,000, 8% CoC @ 10% down

5.5 cap isn't very exciting. I think the deal makes a lot more sense at $200k (7 cap). From there, putting $5k into each unit and painting the exterior would work wonders. I think you could even push rents to $950 a month and have a stabilized 10 cap. 

What are you guys' thoughts? (Not sure if the units are self metered or not - am I high or low on utilities?)

[Michael Seeker]

You can learn a lot just from using Google street view.  Looks like this property is separately metered but can't tell if there is a common meter or not.  If so, that would likely run anywhere between $25 and $75 per month.  Being a bit on the conservative side, you should expect utilities to be maybe $1500-2K per year.  Also there appears to be a lot of deferred maintenance on the exterior which usually doesn't bode well for the interior.