5 unit multi-family - long distance

[Tiberiu Szabo]

Hello Everyone,

I've been widening my search for real estate up to a 2.5 hour radius from my home town.  The town that I found is in rural PA and it looks like there are a couple multi family homes that are being sold in that town.  I did some research on neighborhood scout and took a look at schools and rentals in the area and it seems like it's a pretty nice little town.  Here are a few of my reservations:

-This would be my second investment property. My first one was an SFR, this one is a 5 unit multi-family, so to me it seems like a pretty big jump, but I am excited about it!
-Commercial Loans! Never dealt with a commercial loan... kinda figuring out where to start, what the terms are etc
-Inspection for a large multi unit like this.  There's currently tenants in all units, wondering how that would work with this pandemic.  I assume every single unit will need to be inspected.  I haven't even seen pictures of the units, the realtor says they currently do not have any.
-This is a very small town. Population of about 1400 people, about 39 minute drive west from Harrisburg, PA.  Wondering if vacancy might be an issue. Neighborhood Scouts estimates it at 13%
-Any gotchas that I might be missing.  

Open to all suggestions! Including if you think I'm nuts and should run from this!

Thank you!

[Jaysen Medhurst]

Based on the location, expected tenant class, and age of the building, @Tiberiu Szabo, I'd go with the following:

• Vacancy 8%. That's my standard for MFR. You already have vacancy concerns, so maybe you even bump it up a bit.
• Repairs and CapEx 15% Combined. This is an old building, flat roof, right against the road where it will get more wear and tear. Might expect to spend a bit more.
• Water/sewer and garbage you can confirm with the town.

Were there no interior lights on a house meter? Looks like there would be.

Are you sure that it's a legal 5 unit?