HELP! Deal Analysis and Opinion

[Catherine Angle]

Hello everyone! 

I have found a listing and want to see if the numbers line up to others. 

Here are the details:

It's a four plex priced at $390,000. We got an FHA loan at 3.5% down - already got approved for $390K (hopefully we don't actually pay the full price). All four units are 2 bed, 1 bath, and since it is FHA we will need to live in one of the units. The current owner has the rents posted at $663, making the gross income $31,824. The owner posted the expenses are $14,571 with NOI being $17,253.

It would be different with us living in one of the units of course. Gross would be $23,868 in that situation. 

**We do plan on increasing the rents to at least $700 if it goes through.**

The thing I'm stuck on is the cap rate... it's listed with a 4.17 cap rate, which is not good. 

Please comment with your thoughts and what you think about this deal. 

Thank you! 

[Liwen Gu]

I'm just beginning to learn how to analyze deals through BP. Even increasing the rent to $700, $700*4=$2800 rent for a $390k quadplex in AZ doesn't sound like a fantastic deal to me...but don't go by what I say though, let's see what more experienced investors have to say!