Help with FHA 4plex analyses

[Jose Ramos]

Hi there, I am looking to buy a newly constructed 4plex ( 4 townhouses) in an exquisite neighborhood. I will be living as a owner occupancy for one yr before building my dream home ( I am a physician). See numbers below

Asking price is $390000
Monthly rents $3340
Yr total rents 40080

Monthly Expenses
Heat $100
Taxes 300
Maint $100

Can anyone help me with this analysis.

[Brian Morgan]

If this will be an FHA loan, you need to factor in upfront MIP and Monthy MIP because you only have 3.5 % down. You cannot appraise out of the MIP down the road, and it is a big hit.

Just using the PITI calculation I get:

$390,000 sales price
$12,350 3.5% down
$376,350 base mortgage amount.
+$6,568 UFMIP
$382,936 final mortgage amount

$382,936 @3.5% is $1,719.55 a month
$376,500 x 1.25% MIP is $392.02 a month
$3600 in taxes is $300 a month
$1500 in insurance is $125 a month

Total payment: $2,536.59

With other expenses like utilities, maintenance etc. I would not purchase this property given the gross rent you listed.