MF Deal in the Midwest - Gray Area - Is It Worth Pursuing?
There is a 12 unit multi-family that is on the market in a college town near where I live. The units are 1 and 2 bedrooms and priced just about at market. The landlord has moved out of state and this is the last of her properties and she just had a sale fall through, so she may be more apt to negotiate. The numbers are right on the edge for me, so I'm hesitant (2% rule is at 1.44% and the we are under the 50% rule) . Your thoughts would be greatly appreciated.
Here are the numbers:
Purchase Price $ 325,000
Rehab $ 25,000
Total Cash Investment $ 350,000
Total Monthly Rent $ 5,025
Vacancy Factor 10%
Laundry $ 150
Total Monthly Income $ 4,673
Management (10%) $ 503
Maintenance (10%) $ 503
Taxes $ 564
Insurance $ 300
Utilities $ 426
Total Monthly Expenses $ 2,296
Monthly NOI $ 2,377
Annual NOI $ 28,524
I've asked for receipts and bank records to verify expenses and they are forthcoming. The occupied units will take about $5K of rehab once they turn over (there are 2 tenants that have been there for 10+ years). Should I take the plunge?