SJ 4-plex - what's the proper way to calculate annual rent income

[Garmeon Y.]

Hello all,

I'd appreciate any helpful input from the BP community. I've been told by my family that a rental analysis should calculate income with current rent, versus market rent, if there are tenants currently living on the property listed for sale. The logic being it'll be difficult to raise rents or get them to move out.

Also, I feel unsure whether I've accurately captured all the property's expenses. I have reached out to local property management companies in order to give me a better picture. However, I get a sense that the seller-provided information is incomplete -- most notably whether there are any rehab costs necessary.

Finally, as I'm still waiting on my lender's reply on what I qualify for, I used the 3.875% rate I previously qualified for with respect to a SFR purchase. I am trying to get a FHA loan and put 3.5% down. Still feel uncertain whether FHA offers would be competitive in my market. I have enough for a 20% down payment, just not sure how much I should put down.

I'd appreciate any suggestions for my analysis, as well as what you think the best financing strategy would be. I understand that this deal is far from the ideal $100+/unit cash flow, but I was told in another one of my posts that we're banking on appreciation in my market.

See link below for analysis performed:

San Jose four-plex property