4-plex in Ogden, Utah analysis

[Ben Visser]

I had an acquaintance that is an agent reach out to me yesterday about a 4-plex in Ogden he may be listing soon. He isn't investor minded so I am sure this looks like a steal to him. Any help with these numbers so I can have an educated negotiation would be great!

Proposed sales price: $300,000

2 units are 2 bd 1 bath

main floor units are 1 bed, same square footage, just larger kitchen and living rooms

Leases are month-to-month and $850 each for all 3 units currently rented. $2550  total monthly

Taxes were $2k last year

Owner has owned for 2.5 years and is moving out of state, was living in the now empty unit.

Purchase would be owner occupied either FHA or conventional. Building is brick and built in the 1920's. All I have been told is that it is in "clean" condition, but I have not yet been able to see the building in person. Waiting to hear back on utility costs..

Here are my calculations:

Purchase Price=300,0000

FHA: 3.5% Down=10,500

Payment= $1470 (not including insurance or taxes)

Taxes=$2k/12=167

Insurance? (I'll guess $1k only to have some calc) =$83 mo

Capex- unknown

Management (self, but factoring 10%)= $250 monthly ($340 once it osn't owner occupied)

I'm not sure vacancy rate. We haven't had the duplex long enough to have a vacancy

Cap rate is unknown, and still relatively new to me in concept. Statewide a 2016 report stated 5.9% 

Owner occupied:

Income-expenses=NOI Guess

2550-1970=580* ($193/door "profit")

Fully Rented:

3400-1970=1430* ($357/door "profit")

I know that potential capex and water, sewer, etc may be high, but they are unknown right now.

What am I missing? What should I watch for? Would you buy at $300k or what would you offer?