First Multifamily Purchase! Good deal or bad?

[Simon Wold]

Hello All-

So I have an 8 unit under contract in Olympia, WA.  I would put the address / purchase price on here, but I believe that may not be legal since I haven't closed yet? Anyways, zip code is 98503.

Information is as follows:

• Total monthly income : $5545
  • Five units at $725 / month
  • Two units at $675 / month
  • One unit at $595 / month
• All units are 2 bed / 1 bath @800 square feet each
• Coin operated laundry (income from this is not included because it was not provided)
• Consists of two 4-units on one parcel
• Ann Tax: $4100
• Wtr/swr/grb: $5256
• Insurance: $2896
• 25% down payment with ~4.5% IR
• Assumptions: 5% vacancy, 10% for maintenance, 5% for Capex, 10% management fee. I am going to be managing the property, but I like to assume a management fee for safe measure.

Why the property spikes my interest: Rents in the area for a 2/1 are $850-900.  From what I have gathered, the current owners aren't managing the property well and that's why the rents are so low (they done speak English so its hard to communicate).  With a little work I can easily increase rents to market value.

My main concern: Property is on septic.  From what I have gathered, the whole neighborhood is.  I am not seeing any sewer covers in the road.

Would anyone recommend this for the BRRR strategy? Thoughts / recommendations? This being my first multifamily deal, I am finding myself questioning my thinking.

Thanks in advance,

Hans