Multifamily in Richmond, CA

[Kimber Lockhart]

I'm a fairly new investor looking at multifamily in or near Richmond, CA.  

I find a number of properties like this one: https://www.redfin.com/CA/Richmond/4519-Taft-Ave-9...

It's listed at $783K.  Three units vacant.  That's $2500, $2000 and $1500 market rents.  = $6000.  With 25% down, mortgage is $2750.  

That seems to pass a sniff test for cashflow.  It's not that easy -- what am I missing?

[Upen Patel]

@Kimber Lockhart Its not supposed to be that simple. For one, I am not sure what interest rate you are using, but you are way off on P+I. Your P+I (for 30 yr fixed) is going to be closer to $3,000-$3,100 for a 3-unit investment purchase. Then to that you need to add Taxes and Insurance. Finally you don't take the rent at face value. You need to see if it is real. All unit being vacant for they type of cash-flow, smells to me. Even if the rent is real, you need to discount it to account for expenses. That's when you get to your actual #s.

Hope this is helpful. Good luck.