Utah Fourplex with Tenants. Good deal?

[Kenan Karalic]

Hi, BP Folks!

I recently came across a Fourplex in the West Valley City, Utah area. All four units in the complex contain two bedrooms and one bathroom. The complex was built in 1979. Owner's agent states that all units are rented out as of this posting, but rental amounts were not provided (although I will be sure to get that info soon).

The owner is asking 319k for the sale. Comparable rents in the area for a 2bed/1bath are between 800-850. The complex seems to be in a B-/C+ area, but could easily net $3000/month with current rental rates. I would be purchasing this property using a conventional loan and would not seek to live in it unless necessary. 

I ran a few scenarios on the BP rental calculator, and even if I offered full asking price, my ROI was above 40%, but I understand that is likely over-inflated. I made some assumptions, including low repair cost of $5000 (owner states that units were recently painted and new flooring was installed), no closing costs (as I am paying full price in this scenario), 16k down payment, tenants paying for their own electricity, gas, me paying for water, sewer & garbage. All amortized over 30 years at 4.3% interest rate. Lastly, since I don't know vacancy rates for this area, I assumed a vacancy of 3%. Numbers still looked good with me clearing north of $800/month after all regular monthly expenses had been paid.

So, with all of that said, I would love some feedback on this property from some BP investors. What advice would you offer?

Thanks!