First Time Investor Looking at Multifamily

[Darrell Lewis]

Hi All,

I am a first time investor and I think I have found a 4 family property that I am interested in. I wanted to post the details to see if I am missing something before I take the leap. The property is 95 years old, but appears to be well kept so probably a C class property that sits at the edge of a C+/B- area. A few streets either way changes the area, but I would say this street is B-. Also in my financing figure below I am estimating payments based on 100% financing because I have a family member that will lend me the 20% down so I can use my cash for repairs needed immediately.

Asking Price: $144,500
4 family unit with 2x 2 bed and 2x 1 bed units.
The 2 bedroom units are rented for $700 per month. The one bedroom units are rented for $600 per month. Total rent is $2,600 per month.

My estimated expenses I am using some of what the seller is telling me and then using some of my own numbers. Some of the expenses like insurance and taxes I know are only due yearly, but I plan to sit aside money monthly.

Monthly:

Real Estate Taxes - $87.75 ($1053 per year)
Insurance - $84 (Estimated $1,000 per year, but I haven't talked to an agent yet.)
Sewer - $123.42
Water & Trash - $106.08
Lawncare - $60
Mortgage - 776
Maintenance - $130 (5% of rent)
Capital Repairs - $260 (10% of rent)
Management - $208 (8% of rent)
Vacancy - $130 (5% of rent)

Total Expenses: $1962.92 per mont

Income Remaining: $637.08

[Michael Swan]

I would double that maintenance on an old building like that and add about $200.00 in Reserves per month of have $15,000 sitting in reserves to be safe when Murphy's law raises its ugly head.

Swanny