I've made an offer on my first 4-plex. What do you think?

[Jon Fields]

Howdy Everyone,

I've made an offer on my first rental property and I'd love to get the take of the BP community. Details below:

Property Type: 4plex

Neighborhood Rating: Small Town B, Maybe B-

Asking Price: $180k

Offer: $160k

Gross Monthly Rents: $2,200

25% Down: $40,000

Monthly Debt Service: $590

Annual Expenses (sent by seller)

Maintenance - $1000 (seems light)

Taxes - $1700

Insurance - $525

Garbage - $675

Utilities: $1,200

City Sewer & Water: $1,620

Property Management: $2,640 (estimated @10% of gross rents)

Total: $9,360

What does everyone think?

Thank you,

Jon

[Brian Turnbough]

On expenses, maintenance seems low. Did they mow the lawn or do their own landscaping? A cheap lawn service company would be at least $50 every two weeks, that's $50x26(every two weeks)=$1300 a year on lawn maintenance. Also, is that insurance for 6 month premium or the full 12? It should be closer to taxes. Are the units sub metered for elect? If not, I would estimate $100/unit/month. So $400x12 months=$4800/year.

Other than that price looks good.