First Multi Family - Phoenix - Help Analyzing Deal

[Megan Alice]

Hi everyone, I’m looking at a 4 plex in Phoenix (Sunnyslope area, C neighborhood) and wanted to know if you would make this deal:

$300k purchase price, 25% down. All 4 units completely remodeled, new roof, new plumbing, new electric, new windows. Three 2 bed/1 bath, one 1 bed/1bath. Rents $795, $750, $725, $550, plus or minus. Cap rate 7% and cash flow approx $620/month. 

Would you do that deal?

Thank you!

[Wes Blackwell]

@Megan Alice

Determining whether or not a property is a "good deal" is extremely subjective, because the definition of a good deal is going to differ from one person to the next.

First and foremost, I would ask yourself what you're hoping to accomplish with this property purchase. Is there a certain metric or ROI you're hoping to achieve? If so, can this property help you achieve that? That's #1.

Secondly, what is the opportunity cost? What other opportunities would you be missing out on by committing your funds to this project instead? Would those other properties better help you reach your ROI / investment goal? If so, then you may want to consider those other properties instead.

Ultimately, it all comes down to money in vs. money out. And if these property looks like it's going to be able to get you the return you want, then I'd say it's worth it. It's recently remodeled, so no real capex or maintenance for awhile. It's nice, so you should be able to attract quality tenants and get maximum rents.

If you need someone to pull MLS data for you (like the listing) or other comps, etc. just let us know and we can help you get more information that may help you make a better decision.