[Calc Review] Hoping for a second set of eyes on this deal

[Tom Dittrich]

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*This link comes directly from our calculators, based on information input by the member who posted.

Hey guys,

I'm a new member here. This would be my first real estate transaction as an investor and I'm hoping for a second set of eyes to check it out. It appears to cash flow well based on my own spreadsheet and the rental calculator. Some details:

Its an older home, built prior to 1930. Roughly 3500 sq feet. There are 4 units. Unit 1-3 are 2Br/1Ba and rent for 750. The fourth unit is actually the biggest but is only a 1BR/1Ba renting at 675.. It presently has two beds in two separate rooms, so with some remodeling could also be 2Br/1ba. This unit is currently being rented as a "music studio". Each unit does have refridgerator, sink, stovetops, but not full kitchens. Each has a full bath. 

New plumbing and electrical. Roof is about halfway through its lifespan. Will need new HVAC compressors as well as there is only one functioning compressor, but ductwork is in place. There are window AC units temporarily in place.

Each unit has electrical individually metered. Gas is capped off. Water bill is paid by landlord but he then charges the tenants $25/unit/month. 

There is another unit which is not finished but the realtor does not believe is necessarily worth renting. His impression is that then this would be a "commercial property" and would change property taxes. Does anyone know if this is true? Worst case I feel like this space could be finished and a place for me or my spouse to stay when in town looking at property or working on the place (we are out of state investors).

The rent is presently 2975 on a month to month basis. My plan would be to acquire the property for 140k with a conventional 30yr fixed mortgage. Then I would rehab it with about 40-60k on a rotating basis as tenants left.  Real estate agent feels the rent could then be increased to about 3300 per month. Would make them 1 year leases with each new tenant and put under property management.

After repair value is about 300k per real estate agent. 

Plan is to offer 140 and hold strong. List is considerably higher but the property was acquired for 55k under foreclosure and minimal cap ex was put into it. Was not a full flip. It also has been on the market for 6 months.

What do you guys think? Am I on the right track?