What do you guys think of this 4plex deal in Alabama?

[Jake Snavely]

Hi all! I’d love to hear your advice on this. I have a 4plex under contract in Decatur, Alabama. Decent area, built in 1984, roofs and HVACs 8 years old, property is more or less turnkey. Under contract at $129,000 - not necessarily a below-market deal but there’s maybe $7,000-$10,000 of market value equity there at this purchase price. However I’m looking at this as more of a buy and hold cashflow turnkey strategy. All 4 units are 2/1, and current rent for $470, $470, $470 and $500. Neighboring identical 4-unit buildings are leasing for $550-$650/mo so there’s a good chance I can slowly raise rents. 25% down conventional financing. PITI $873/month. 10% property management. After PITI and mgmt cashflow is $846/mo. Taking into account capEx, maintence and vacancy I’m looking at worst case scenario net monthy cashflow at half that, which is $423/month. Let me know your thoughts! I truly appreciate it !

[Dennis M.]

Originally posted by @Jake Snavely:

@Dennis M. @James Allen @Peter McDonough

Thank you guys for your feedback! I truly appreciate it. After taking your advice (which is what my gut was already telling me) and further analyzing the numbers I realIzed that even though I really WANTED it, as a business decision I decided against it.

Thanks!

You have chosen wisely grasshopper . Many times I have found a property I really liked . Nice area nice building lots of room for improvement but despite all my rationalization I just couldn’t make the numbers work and had to move on . The good news is investment properties are like city buses , wait around awhile  and another one will come on by soon enough