5 Plex purchase analysis -- First time buyer with questions

[Nathan Adams]

I'm purchasing a 5-plex in Montana. I do not live in the town and a value add for me is a handyman childhood friend is willing to managing property for 10% of rents. Plus the most successful realtor in the town is also a friend, so I feel safe about all information they are providing.

Property Info:

5 total units: 4 - 2BD/1BR's and 1 - Owner's unit 1BD/1BR w/ a loft and garage. Total rents currently bring in $2900/Month. Laundry brings in another $100. All units have separate meters -- Tenants pay water, electric, ect. 

Loan Info:

Owner is carrying note for $285,000 and I'm putting 50K down. 15 year loan @ 4.35% -- W/Tax, ins, ect -- my payment is @ $2150/MO.

The 2 BD/1BR's rent for $600 for upper and $500 for lower (although they are the exact same layouts). I have been told by a realtor/family friend that I can safely get $650-700/MO for all units. 

The tenants are all long term and there is no rent control in the Montana. Do I risk risk losing them and raising the rents? Or keep things status quo?

Also, is the interest rate fair? And am I missing anything in this investment?

Thanks in advance for your input!

[Zachary Foust]

Because adding in a modest 5% buffer for vacancy, the 10% for your property management, and maybe only 8% for maintenance.

5% Vacancy: $1800 annually    /   -$150 monthly       

10%  PM: $3600 annually         /   -$300 monthly

8% Maint.: $2880 annually        /  -$240 monthly

Mortgage, taxes, and ins.          /  -$2150 monthly

Rent per month: $3050

Expense per month $2840

Net Income: $210

You would profit, but not exactly to much for the work it'll take. 

I personally would suggest raising the rent and adding in a higher Vacancy buffer, especially if you check the local rental rates and see its plausible based of comps.