Deal in REOTown Lansing

[Kyle Nelson]

I have a quadplex available in Lansing Michigan that the seller is offering to me for $100K

I would probably offer less ~80K

3 of the 4 units are currently rented for $600 each w/ utilities included each with 1 person.

I would be using FHA financing at 3.5% down and live in the unrented unit.

I think there is a lot of differed maintenance as the house is about 115 years old. The house needs exterior updating, a new roof in the next few years, water heater etc. (all within 5 years)

Running the numbers fully rented:

Gross rent: $2,400

Utilities: $350

Mortgage Payment, Interest PMI and Taxes: $921

Vacancy: $200 (one month each unit)

CapEx: $240

Maintenance: $300

Management: $ 240 (It'll be self managed for awhile)

After expenses: $329/mo

While living in the unit I am expecting -$161 out of pocket per month

The numbers seem pretty good to me but there aren't a lot of comps I can find. most of the houses in the area sell for very little. One benefit I see to this house is that it is one of the worst on the block. 

So my question is, is this a good deal? Am I accounting for my expenses properly? The seller has a lot more properties that cash flow like this that I don't have the capital for, but if this interests you, feel free to reach out and maybe we can partner on a deal.

Let me know if you would like additional details.

Thank you for any help.