Help analyze this Quad in DC

2 Replies

I'm new to real estate and found this 4-plex in DC that I'm analyzing. The location is 0.4 miles away from public transit, a university, and bars. I'm unsure about maintenance estimates. The apartments have been renovated (though don't know how long ago and haven't seen them in person) with new appliances and HVAC. I don't know what it takes to manage a 4-plex and what kind of maintenance costs to expect. I assume the listing agent could tell me when the roof was last replaced, etc. I'm also a little worried about vacancies since 3 of 4 leases are ending.

Given my estimates the property will barely cash-flow so would need to reduce purchase price or add value by adding additional bedrooms.

The FHA 4-unit PMI is $688/month for 11 years and then it's removed which makes the deal sweeter down the road. But perhaps maintenance costs will end up negating any profits for 11 years...

https://www.biggerpockets.com/analysis/rentals/44ec01cc-689d-4b57-89ee-8687fc78508e

If you are using a low down payment with PMI, you should expect to be cash flow negative in DC in most cases.

What neighborhood and cross streets is it at?

This is Brookland. 7th and Randolph NE.

Looks like the BP calculator doesn't include PMI so my estimates don't make sense and you're probably right that it doesn't cash flow unless I put 20% down. I'll see if I can open an enhancement request for the BP calculator to see if PMI can be included.

8% management fees, 5% maint, 5% cap ex, 5% vacancy. Does anyone with experience managing a 4-plex think these fees are low or accurate?