Figuring out if this is a Deal?

Question

Hey I hope I'm not wasting anyone's time here but I'm trying out @Brandon Turners' 5 minute suggestion for analyzing a multi family property. And I found a house that might make sense for me.

Asking price $130K
#1 - 3bdr 2 bath - 900-$1000 rent
#2 - 2bdr 1 bath - $650-700 rent
These rents are a guess taken from Rentometer & Padmapper.

At $26K down & $515 mortgage the 50% rule puts this at $260 cash flow.  If I can get it for $110K-$120K then the numbers should be even better.  It's a short sale and has been on the market for almost 4 months.

I'm going to drive by the house tonight.  It's about 10 minutes away from my house.  I know the area pretty well as a homeowner but not as an investor but it's a decent part of town.

What do I look for next?  Does this one merit more investigation?

Mehran K. · Answer

From the info provided, it would merit more investigation.

How long has it been on market? Reason owner is selling?
Are there tenants in the property now? 
If yes, what are the current rents? Ask to review the leases.
If not, why?
Get the property tax amount
Are the utilities separately metered?
Is there lawncare/snow removal?
Get an insurance quote
If there is a PM in place, I've got a decent interview template in my Fileplace.
Ask for rent roll & maintenance/repair records for the past 2-3 years.
Figure out the status of the main systems, hvac, roof, electrical, plumbing etc.

Just ran that off the top of my head. Hope that helps, keep us posted Travis!

Steve Babiak · Answer

Seems OK.  Now you have to try to pin down the actual numbers - rents, taxes, utilities, etc. to see whether the original assumptions you made still hold.