Evaluate this deal on a four-plex

[Dustin M.]

Hi.

A four-plex in my area is currently for sale for $70,000. From what I have learned from the sellers they are extremely motivated to sell because they recently divorced and neither of them wants to own the property outright. I was thinking about offering them $50,000 or less.

Currently the four-plex has rents of $450, $450, $550, and $550 for a total of $2000 a month. The owner pays the utilities which range from $400 to $600 a month.

The home needs a new roof on it (should be around $5000 to $6000) in addition, the house is using a boiler heat so it might be cost effective in the long run to upgrade this.

If I follow the 50% rule for expenses should I just add $600 for the utility bills to come up with my likely total expenses for the month. This would end up being $1600. This would only leave $400 for PITI.

Is $50,000 a fair price to offer for a home like this. Maybe I should offer less because of the roof and boiler issues (and the fact that the tenants don't pay for utilities).

Thanks,

Dustin Michaels