New Investor, Closing on a Quad in 2 weeks

[Mark Stearns]

I'm just now getting back into real estate investing after getting hit hard back in 2009. I am under contract for a quadplex and close in two weeks. The purchase price is $220,000, I'm putting 25% down at 4.5% fixed with a 30 year term. The quadplex is fully leased with the tenants paying $2,675/month. Right off the bat, I've got an R/V of 1.22%. There is some deferred maintenance, nothing too terrible, but the rents have not been raised in the last 4 years and are significantly below market. 

Obviously this is a great cash flow property, but, it being older with deferred maintenance there is some risk that I will need to sink in some capital to keep it running. 

The previous owner did not market the property well, advertised a monthly rent less than actual and has not kept the rents up with the market, as there have not been any leases issued in the area in the last 18 months for less than $750/mo, suggesting that there is at least a 20% upside (two smaller units should rent for $750, two larger for $850, currently there's a $100 spread between the two) on what I'm able to collect currently. Even with the poor advertising, there was a flood of interest in the property, to the point where the owner just said, "give it to the first full price offer" which was me. 

So, if you were me would you:

1) Ride this cash flow train as long as possible until the IRR starts to decrease, which should be around 2026

2) Raise the rents to as close to market as possible without chasing away the current tenants and sell immediately. If so, can I get away with selling for an R/V closer to .9 or is that wishful thinking?

3) Any other ideas?

Thanks in advance for taking the time to look at my deal.

Mark