Please help me analyze this deal

[Mayer M.]

Hey Guys!

I am planning to buy the below property cash and immediately turn around and do a cash out refinance to get 100% of my money back. Can some of you pros help me analyze this deal?

Year Built: 1960

Roof was replaced in 3 stages. Upper main roof first half replaced 8 years ago, second half replaced last year, and lower roof was replaced last month.

4 Separate Crown Aruba Gas Boilers, regularly serviced and approximately 20 years old. 

4 Separate Gas hot water heater (ages vary)

Washer Dryer hookups available in basement for coin laundry for additional income

Exterior painted two years ago

Vinyl Siding

Property just passed state inspection

Replacement energy efficient windows

Purchase Price: $210k

Appraised Value: $285k

Property Type: Quadplex/Turnkey tenants in place

Area: B

Units: 1-3BR, 3-1BR

Rental Income: $3365 Per Month / $40,380 per year (rents can be raised 5% upon lease renewals)

Utilities: Separately metered, each tenant pays their own gas and electric

House Utilities: Common area utilities are about $20.00 per month

Water/Sewer: Landlord pays water sewer at $125 per month

Property Taxes: $7855 per year

Insurance: $2500 per year

Landscaping/Snow removal: $1221.00

Vacancy: ???

CapEx: ???

Capital Improvements: ???

Can you help me out with analyzing this deal? The plan is buy cash and immediately cash out refi to get 100% of capital back. Thanks!!!!

[Mayer M.]

Hey Patrice,

I think I was just also feeling like it’s too good to be true and maybe I was missing something.

Turns out it was. Found out today less than desirable tenants, one tenant is moving out, Lots of deferred maintenance, and my contractor thinks they’re covering up things.

As it sits still makes a pretty good deal, but because of these factors I’d rather just pass.