Need help buying my first four plex

[Stephen Gantz]

My wife and I are considering buying a four plex in Houston TX and want to know what are some things we need to know about the property to make a solid decision. Here is what we know so far: Out of state land lord Has been for sale for more than 3 months Asking price 240k Built in 1981 Each unit is 1050 sqft 3/2 with utility room Rent is $1050 (I have not seen the actual numbers this is what the real estate agent told us) Landlord is paying water and trash but don't have those numbers. Two units are currently leased Last roof: unknown AC and water heaters are currently working but do not know when they were last replaced. The other two need a complete remodel. Can anyone help me analyze this property to see if it's worth it? Thanks

[William Hochstedler]

Before looking too closely at the operating numbers, you need to know what the market is.

On 1-4 unit properties, the value will come from comparables in the area.  What are similar properties selling for in that neighborhood?  If the answer is $200K, it's probably not a deal.  A real estate agent is the best person to help you with this because they have real data on sold properties.

Once you know the market (including market rents) and the property looks like a good value, get it under contract.  Then use your due diligence period to dig into the operating data and physical condition of the building to make your final decision.

From what you posted, it sounds like it could be a winner.

Good luck.