How to analyze a fourplex deal?
I am looking to buy a fourplex in the $200-400k range. I am open to all cities and states, so long as there is low crime, good tenants and solid cashflow.
I have been trolling loopnet for the past few days, and it seems that the vast majority of properties either don't break 1%, or just barely break it. The very few that do break it seem to be in questionable areas, and in fact the very best I found had rents at 1.4% purchase price. I found one in particular that doesn't quite break 1%, but has 4 - 3 Bedroom units, all with separate garages, in a good part of town. It seems like a very stable deal, if the cashflow numbers work.
This doesn't sound too great, and as a SFH investor 1.5% is usually my bare minimum. Of course, with a fourplex we have better economies of scale, but also (I believe) a higher chance for vacancies.
I have heard that investors have done well with 1% rule multifamilies, so I would like to know if I am being too picky. On the other hand, I have heard that loopnet is often not the best deals. What are your thoughts?