Need advice - North Austin 4-plex off market

6 Replies

Dear BP Members,

A 4-plex deal came across and I would like some suggestions if this is fair deal given the crazy market in Austin.

Specifics below -

  1. 4-plex each unit 2 bed 2 bath. 
  2. Built in 1990s
  3. Area - North Austin (RR, etc)
  4. Offer price - $615K
  5. Rent Roll - $4650 per month
  6. HOA $265 per month
  7. Any major expense (roof, foundation, AC) - none

Thoughts?

Running basics on the calculator assuming you paid full cash of 615k this is a good cash flow deal but low COC return. (my numbers can be way off as I'm assuming a fair amount) Even as I play with the numbers if you refinance It is still a terrible COC. I could be 1000% wrong since I'm assuming some info. But that's your personal decision, if you like the high cashflow with low COC.

I would look at if rents can be increased or how much it would cost to put some vinyl floors, white walls, and black trim or whatever it may need to be more optical to premium rent. As an attractive place in Austin in the right area should be able to bring in more then the 1162.5 average I am seeing here. A nice place should be able to get 1700-2200 depending on various details. Tough to say with info given. 

Thanks @Collin Bryston Adams I will finance it with 25% down. I do agree is is terrible COC deal. Rents for 2 bd 2 br do not support more than $1200/apartment in much nicer apartment complexes so I think between 1100-1200 is fair rent.

So question in front of me is that is this a decent deal for North Austin area?