4 plex at market value

[David M.]

Hello BP community,

Do you think this is worth pursuing? I understand the main goal is a "great deal," but for my first time out, I'm ok with an "ok" deal at the moment.

4 unit (2br/1ba each), market rents are 750-800, currently all are rented for about 640-650. Seller would be asking 280K. Using 8% vacancy, 8% repairs, 8% PM, there is no cash flow. Without PM, it would be ~200/month. (I do plan on self managing, but want to build PM in as well). Goal with this is long term buy and hold.

If I run the numbers with slightly under market rents, and institute RUBS, it ends up cash flowing about 525/month (including PM) which is about 9% CoC. (30 years @ 4.9 %, 25% down)

Those numbers are pretty good for this area from what I've been seeing. This owner though hasn't increased her rents, but is selling based on what market rents could be. Property is in above average condition with a lot of recent improvements including new roof, windows, an 3 of the 4 units fully rehabbed within the past 2 years. 2 of the 4 water heaters replaced last year.

Thoughts?