First Investment Property- Need Help

[Pat Cruz]

Hi, I'm A new homebuyer that wants to buy a fourplex investment property with a FHA loan. The fourplex has currently been remodeled and seems to be in great condition. All I would like to really know is if investors or experienced people in the real estate profession believe this property to have sufficient positive cash flow and if it's the right time to buy. Please help me thanks! Here are the details:

Asking Price: $187,000

Purchase price: $180,000

Base Loan amount: 173,700

Down payment: $6,300

UFMIP (1.7%): $3040

Total Loan amount: $176,740

3 - one bedroom units $500

1 - two bedroom unit $600

Total monthly: $2,100

Monthly payment: $1,343 including:

Principal & interest: $804

Property Tax: $180

Homeowner insurance: $67

FHA: $148

Repairs: $60

Vacancies: $84

If you need more information, please let me know what it is you need to know.

[Chris Eaker]

Congratulations on getting into the game.

You need to set aside 10% of gross monthly rents min for repairs/maintenance and 5% for repairs. So on these numbers, that's $210 for maint. and $105 for vacancy. Since this is a 4-plex, you will need to maintain the lawn, so include yard maintenance in there. I see you're in Vegas, so I don't know how much lawn maintenance is required out there. Here in TN, we have to cut grass and pull weeds. You will also want to include things like pest control. Will you need to provide a dumpster, or will the City provide trash pickup for each unit as part of your property tax bill?

Looks to me like this deal might be a bit on the slim side, but you will have to make that determination. On 4-plexes, I look for minimum $100/door.