Last day of inspection TODAY...someone please look at my #s

[Susan Franke]

Hi all. Today is the last day of an already-extended inspection period. Please help.

asking price 320K. downtown Lake Worth, FL. 4 plex wood frame 1936. land alone is worth 100K according to the county appraiser. fully rented now at 850 each for 4-400squarefoot studios, needs new roof, updated electrical, couple plumbing repairs, etc. its old....the owners have had this place 15 years and have only patched it up. we're looking at an FHA 203K loan.

The numbers: 

tax: 405

ins: 324

util (landlord paid): 500

5% vacancy 190

10% repair: 380

capex: 200

termite bond/spray: 50

total 2049/month, operating expenses.

if we dropped the price to 300K, (and we're doing FHA...3.5% down) we add 1554 P/I + 204 PMI. 1758 + 2049 = 3807 monthly.

estimating rentals can be upped to 950 (GREAT location, 400 square foot studios), this is our break even number...(270 asking price + 30K construction loan).

Is this a smart buy? break even now is only going to mean profits later, right? addition of insulation and new windows will decrease utilities and insurance, for example. the neighborhood is moving up up up - property value will only rise. 

A+ location, beautiful house.  

needs a lot of work, and we have to assume the cast iron sewer pipe isn't goign to explode the day after we buy it.