Pick this deal apart...I would love others opinions
Hey bigger pockets! I have a few questions for some of you more experienced veterans who have bought Quadplexes in the past. I found a fourplex in a neighboring town with a good chance for positive cash flow. I did some quick calculations and even used the Calculator here at BiggerPockets and have been digging for detailed numbers ever since. I intend to take a look at the property in the near future as I have already contacted a realtor and made contact with the owner of the property. I would be extremely grateful if you can spot check my numbers and show me where I might be off-track.
Here are the numbers:
List Price - $129,900
ARV - $160,000
Monthly Rent - $2,450
Assumed Average Vacancy - 5% (currently 100% occupied)
Homeowners Insurance - $500
Property Tax - $2,700 (Annual) = 225 (Monthly)
Water/Sewer/Trash - $300 (High Estimate)
Management Fee (10%) - $245
Landscaping Fees - $60 (monthly)
Financing Costs (5% Interest, 20% Down, 30-yr Fixed) - $623
CapEx 2%, Repairs 2%, Vacancy 5% = $196
Total Expenses - $2149
Monthly Cash Flow = $2450 - $2149 = $300/Month
Yearly Cash Flow = $3,600
The Cash on Cash Return is about 11%.
I am very excited to hear your feedback!
-Mike