Walk or Buy? Seller's Counter offer

[Dustin Beam]

So I previously started a thread about a property I was looking at and I put an offer in, admittedly it was a low ball offer. The Seller didn't budge much, went from $300k to $290k and now to $285 plus closing costs. I ran more numbers....being my first property I really want as much conservatism in my analysis as possible to make up for any noobie calculation mistakes. I have a pic of my analysis below. 

I'm assuming an additional $20k in it for fixing up the place. That is a super rough estimate as I've only been inside one unit. My offer is obviously contingent on seeing the entire building, thorough inspection, etc.

Anyway, I'm tempted to walk away, but yet the numbers aren't bad. The building isn't a "steal" either IMO. I should mention that the building will be very close to where I live (a nice bonus), is in a lower income (mid $30k per household) area. HOWEVER, it's very low crime (1 block from police station) and is surrounded by middle and upper middle class areas with very low crime. It's simply an area where people don't make a lot of money, but everything else is good. I'd have no problem with my girlfriend going there at night.

So take it or walk?

[JD Martin]

$200 per door on a multi-family is really not too bad. And you've done reasonably well on overestimating some capital costs (i.e., good units properly maintained last far longer than what you've budgeted) but you have left out flooring and turnover rehab costs (paint, basic repairs, etc). But you do have a pretty strong miscellaneous category. 

If you are comfortable with the rehab costs and have a strong cash backup it's not a terrible looking deal on paper. However, one thing I don't see is how many units account for that $4000/month. If it's 8 units, one vacancy won't kill you; if it's 4 units, one vacancy gives you negative cash flow. For me personally (though I have to temper this with the fact that I only have SFHs anymore) I like a 50% break-even rate, i.e. half of the building could go vacant and I'd be at even numbers. Most investors won't run with a number like that, as that's catastrophic, but I like basing my deals on worst-case scenario and go up from there.