Help in Breaking Down this Multi-plex Deal

[Ryan H]

In my search for a single family residence, I came across a multi-plex listing. The original plan was to buy a primary residence in my wife's name while keeping our San Francisco condo in my name until next spring when we are ready to move. Sell the SF condo and take the proceeds and roll them into some SFR rental properties, probably in Austin.

However, the idea of a fourplex of SFRs in Sonoma County is appealing as well. Here are the stats:

Price:	$825,000
No. Units:	4
Building Size:	4,060 SF
Price/Unit:	$206,250
Property Type:	Multifamily
Property Sub-type:	Garden/Low-Rise
Property Use Type:	Investment
Commission Split:	2.5%
Cap Rate:	5.06%
Gross Rent Multiplier:	12.43
Year Built:	1998
Lot Size:	15,367 SF

Net Operating Income $41,722

There are (3) houses that are 3BR/2BA and (1) that is 3BR/1BA.

The price per house is about half of the current market rates for other SFRs in the area. The units need some work/updating and that is the first unknown as I haven't toured them yet.

I recall other BPs saying they won't touch a multiplex deal with anything less than a 6% cap rate. I get that but given the market I am looking to move to is pretty small, this seems workable.

We are having trouble breaking into the Sonoma market and have been outbid by $100K+ over asking cash offers several times. I am considering this as an alternate way to get into a SFR in the area and acquiring rental property at the same time. Kind of like the old duplex idea of live in one side rent the other to cover your costs but a wee bit bigger.

Thoughts?

Warnings?

Supportive advice/encouragement?