How is this deal: 4 Units, $60,000, St Louis, MO

[Billy W.]

I wanted to get some thoughts on the following deal I am looking at:

The owner has verbally said he wants $60,000. I have not received any records of expenses yet. The owner is an older gentleman who is sick of the work required to maintain the property.

4 Large 1 Bedrooms: Current rents @ $485, Market is $450 - $700

$485 x 4 = $1940 month
10% vacancy rate
50% expense rate

Net Monthly Income: $776 a month

Annual NOI: $776 x 12 = $9312

This building is older and will need some work, but it is in good enough shape to be occupied. My friend has been living here for a year without an issue. On Street Parking only (Maybe put a parking pad in the back for the tenants?) and no Washer Dryer.

I am hoping to get the building for $50,000 and put ~$5K into each unit to fix it up and bringing rents to $550-600.

This deal is in a B- area of St Louis.

Thoughts?

[Tom Devost]

A,B,C,D is the way many investors classify neighborhoods

"A" would be the most classy and "D" would be a war zone. "A" does not mean you would get the best return on your investment. I tend to stick to "B" and "C" areas.

Hope that helps