Fourplex (maybe 8 units)

[Jorge Benavides]

A couple I know, is building a couple of 4plex that they plan to sell. They offer management for the property as well. They said price after building is complete will go up, and in the case that I buy, I would receive the apartments once complete and with tenants (75% occupancy).

I’m interested and it would be my first Real Estate Investment.

Asking price is 325k

Market Cap is 9%

I would get a loan through FHA (3.5% down payment) and will have to live in one of the units for at least the first year, reducing the possible rent income by almost 1/4, thus making my expenses + loan payment more expensive than my earnings. By around $300-600 (so market cap would be affected there)

(I pay $500 now where I live and have 2 roommates so it would not be much of a difference)

I’m considering having my dad invest (conventional) in the other 4plex, as this would bring the price down for a combo-deal of 635k for all 8 units.

Does anyone have any suggestions? Do you think this is a good deal? Should I try to negotiate the price down? Is a brand new deal too risky?

thanks in advance