Is this an O.K. deal? 5-plex

[Shari Posey]

The property I'm looking at is a "rehabbed" 5-plex. The owner bought it earlier this year for $290k but really didn't do much to it other than some minor maintenance and paint the exterior (ugly). There's room for improvement to increase rent about $250/mo. One problem is he has very little documented expenses so I'm using figures from other props on the market. FYI--it sold to the last owner before the peak for $550k.

5-plex in a B-/C+ area. 5 electrical & gas meters, 1 water meter.

Purchase price $375k

Currently fully rented at $3550

Monthly Expenses:

Prop. taxes $406 (1.3%)

Pool $110 (per seller)

Gas $75 (per seller)

Trash $102 (per seller)

Water/sewer $63 (per seller)

Electric $312 (per seller but this seems twice as high as other props)

Insurance $100 (my estimate)

Gardener $100 (my est)

Prop mgr $350 (my est)

Vacancy $350 (my est)

TOTAL EXPENSES: $1968

I'll put 25% down at 4% fixed for 5 years, amortized over 25 yrs.

P&I: $1484

The rents are pretty good but the expenses seem high however every multi-family I look at has high expenses. Pools are common in the area.

IF I can get it for $325k that would reduce the mortgage $200, prop tax by $50 and increase rents by $250 it looks much better.

What do you guys think? THANKS!!