4 Plex Analysis on Deal

[Rajat Chopra]

I am looking to purchase a 4 Plex that looks as follows:

Purchase Price - $249,000

Rent Collected = $3,150 / month

P&I - $955 / month

Taxes - $400.50 / month

Insurance - $218.67 / month

Water - $160 / month

Property Management (optional) = $315 / month

Landscaping - Handled by Renters

Deal Structure - 20% Down and Conventional Financing 

Projected Cash Flow = $1,100.83 / month

This is the best deal I have found in the price range I am looking for so far.  Since the renters are already in place, I hope that with a smooth transition I can take over as a new landlord.  I would promise them no changes in rent since they handle the landscaping already. My only concerns would be the renters themselves - I hope they will pay rent on time each month - but I won't find that out until I am the owner. Also the area is not the best - probably a C- or so - but I grew up around there so I am familiar with things already.   

As they move out, I plan to renovate each unit with vinyl plan tile, fresh paint and update bathrooms and kitchens.  I believe there is room to increase the rent and these upgrades would justify that for any new tenants. 

Even if they do not move out for a while, this is still the best deal I have found so far. 

Would appreciate feedback on this deal, how it looks and if there is anything I should do further checking on.