First multi-unit

[Steve T.]

Hi all,

Just looking for some feedback. I am in Spokane, it's a small enough city that it can be tough to find opportunities. There is a fourplex that just went under contract for $120k, gross rents $1740. Apparently the buyer backed out at the last minute after the inspection.

1740/120,000 == 1.45% of purchase price in rents, that is as good as I have seen in Spokane. The place is old (built 1901) but all units are separately metered and apparently currently have tenants on month-to-month leases.

Assuming I get a look at this place and the inspection issues are cosmetic, what do you think? I could wait around until I die looking for a 4 unit building at 2% rent to price in Spokane. I could also really use some passive income because I have tax losses on a SFH that I can't take out of my regular income because of AGI limitations.

I really appreciate any help, thanks so much.

Steve

[Steve T.]

Well, yes - I've researched my area, I don't think retail investors like myself are going to find a place with much better numbers than this one. I cannot manage, I just can't - I work fairly long hours as a lawyer and it is not an efficient use of my time. The building being so old doesn't scare me much - there are a ton of them here in Spokane - but I doubt there's a whole lot I could do to spruce the place up.

One other thing is I'll be on the hook for water/garbage/sewer. I wonder about these guidelines like the 50% rule, I don't see how that can apply equally to situations where landlords pay water/garbage/sewer and situations where they don't.

I suppose making an offer for 90k couldn't hurt. They can always say no, and I can watch and see if the property sells and if so for how much. Or ... maybe they say yes.