My first investment property, 2 unit multifamily in Texas

[Christopher Oliva]

Hi Everyone,

I wanted to get the take of some seasoned investors on this deal. I'm currently on the hunt for my first investment property, and i'm looking at Multifamily properties. I'll be using an FHA loan to make this purchase, which i'm starting to become a little concerned about because my cash flow won't be nearly as good compared to if i could afford to put 20% down. I'm looking at a Duplex in Texas, obviously since i'll be using an FHA loan, i'll be living in one unit for at least a year.

• Property type: Duplex
• Potential Offer: 180k
• PITI: $1455/month
• Current Rents: 875 per unit (1750/month)
• Water: Tenants pay $70/month for water
• Electricity: metered for each unit
• Taxes: $4100
• Repairs: Advertised as being is good condition but i won't know repairs until I have the property inspected
• Property management: 10% or 175/month (i'm guessing the management is going to be around 10%, i have to do more research on this)
• GRM (gross rent multiplier): I'm told by my realtor that the current GRM for the area is 9.28 (based on annual income, not monthly income). If i get this property at 180k, the GRM would be 8.57.
• Cap Rate: At 180k, my cap rate would be 9.79%

Any input on this deal is greatly appreciated!