HELP -- Is this 4 plex rehab a good deal?

[Josh W.]

I am considering a 4 plex house hack in Los Angeles where appreciation has been fairly high (though subject to change), and I'm considering living in one of the units and renting out the others. However, this property needs a MAJOR 150K rehab before it can be rented. The upside is that it's probably the worst property on an otherwise nice street with good rental demand. It's going to be a lot of work (and also my first real estate deal) so I'm wondering if I'm getting in over my head?

Any wisdom would be appreciated!

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

[Michael T.]

@Josh W. if you are able to get $6,300 in rent and with the 50% rule I think the deal makes sense as long as the property is in a good location for appreciation.  It sounds like the rental demand will be good.

Just a couple of things from the analysis; your closing costs will be closer to at least $12,000, do you already have a 4.5% interest loan and do you have a 30 year loan?  If you do not have the 4.5% and 30 year loan secured your numbers will change a little.

Based on the limited information I think you purchase the property, get the rehab done asap, get renters in, hold the property for 6-8 years and then sell prior to the Olympics coming in 2028.