Obaining a 4 plex in Tempe, Az

[Robert Stephan]

Hi BP,

My souse and I are surveying the East Valley of Arizona for 4-plexes and Duplexes and other building up to 20 units. We prefer to start with one 4 plex to get our feet wet. Most of our investing has been with SFR rentals that are property managed. We are trying to evaluate the prices on these properties and it seems they are super high, everywhere! I don't get it and was curious if we are missing something. The real estate agent said there is a "premium" on some of them because it's close to downtown or a college.

description: 4plex, Studio Units (fully renovated)

Price: $475k

Rents: $795(seem to be ok for the area)x 4 units=$3180.00

50% rule= $1590

Down payment: 30%(seems to be the norm for down payments)

Loan: 332,500 @ 6% over 30 years = $1993.51

---------------------------------------------------------------------

Math shows I would be at a Negative C/F of -$403.51

So Obviously the offering price is wrong, but what would be a good price for the property? Im not looking just specifically at this property but want to ensure my analysis skills are sharp. I know these are basic numbers but im just trying to get confidence. any assist in this would be great.

Thanks

Robert