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Updated almost 13 years ago on . Most recent reply
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4plex Deal - I like it, do you?
The property is a 4plex with four 1/1 units in a nice neighborhood filled with SFR.
Asking price: $120,000.
Disclosed Operating expenses:
- $80/month for landscaping.
- Tenants pay water/sewer/cable/phone/garbage/electricity
Reserves I Calculate:
- 6% for vacancy. ($96 per month)
- 6% for repairs. ($96 per month)
Estimated property taxes: $1,462/yr.
Estimated insurance: $1,482/yr.
Lending Terms:
25% down payment = $30,000.
$90,000 @ 4% over 30 years = $429.67/mo.
Each unit currently rented at $400/mo. NOI = $12,996/year. Positive cash flow before taxes: $653/mo.
----------- Disclosures to BP:
Property inspection has not happened. If it reveals issues, the numbers will have to change or the deal will be cancelled.
Am I missing anything?
Most Popular Reply
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No. For $400 rent I would want to be under $20,000 per unit. A bit less really, given the low rent. And 1/1s aren't going to get good long term tenants. So you have more than typical turnover.