4 family asking 145k

17 Replies

4 family fully occupied. I believe I can get the rents up when they leave specifically the 3 bedrooms as I think they are under market.

current ask 145k

Electric 20/month

Water 140 month (seems low?? but owner provided)

Taxes 3k a year

1bed 475

1bed 425

3bed 575

3bed 625

These are the current rents. I think I can get the the 3bed at 700. And the 1bed to 500

@Steve Candor  

At a quick glance this looks like it would cash flow as is.  Is this another look at a cash purchase?  If it is, assuming 10/10/10 for vacancy/repairs/capex, you're looking at just over $1000/mo.

Is the water low based on what you know for the area? Water varies a lot regionally,  You may want to call the water company if you have questions.

What about trash, lawn , and snow removal.

@Hattie Dizmond  yeah it should cash flow positive . What are your thoughts on the deal?  I'm thinking if I can get it for 120k then it'd be good deal. 12k/120k is 10 percent a year. And if I can raise rents bonus. But not sure if that's realistic.

  trash is 90/year. I have to find out how many bins I need. I think 360 a year. I'll have to pay someone to shovel and take care of the lawn too.  Definitely will verify water too 

@Colleen F.  

@Steve Candor  

Here in DFW that would be a very positive cash flow, so I would love the deal.  But, you also have a lot of expenses I don't have to deal with down here, like snow removal!  Dallas version of snow removal...wait until tomorrow, it will melt.  :-) 

The electric looked low, if you are paying all the utilities.  If the electric is just for exterior lighting, then that makes a little more sense. 

In the end, if the deal meets your goals, then it's a good deal.  Here in DFW, in good areas with good schools, people are pretty happy to get a cash flow of $200/mo, with a mortgage.

@Hattie Dizmond  Thanks. Yeah it's just exterior lights. The units each pay their own Heat, Electrical, Gas. 

it's not in the best neighborhood. but maybe one day that will change. 

@Steve Candor  

You can get some great cash flow properties in not the best neighborhoods.  As long as they are stable neighborhoods and not declining, I'm ok with that.  Good luck!

Just curious if you bought it or not?

It would be awesome to have a 4-plex in one area instead of 4 different properties all around town. 

Good luck!

Originally posted by @Steve Candor :

4 family fully occupied. I believe I can get the rents up when they leave specifically the 3 bedrooms as I think they are under market.

current ask 145k

Electric 20/month

Water 140 month (seems low?? but owner provided)

Taxes 3k a year

1bed 475

1bed 425

3bed 575

3bed 625

These are the current rents. I think I can get the the 3bed at 700. And the 1bed to 500

How are you going to manage this?

What are the property management fees?

It is a small # of units, so cost will be a greater proportion of revenue than larger buildings.  Or are you planning to move?  You might be forced to if management doesn't go as expected.  FYI: property management on smaller unit properties are more difficult than with 60+ unit deals.

This is all utilities paid by owner? 

Do buildings around this also offer all utilities paid?

Individually metered for electric?

Any way to have the tenants pay utilities or setup a RUBS system? 

Yes, water seems low. 

When was it built?  What type of HVAC does it have?

If old, you might have to spend a good chunk of change on HVAC.

@Account Closed  

1.) Management - I'm in NYC. I was just going  to have them call my cell (separate) and if they need immediate help or say water damage I have a super in the area that can take care of it. 

2.) Not going to move. I am several hours from the property but have friends, family, etc who will help me if needed. 

3.) Separate utilities for each tenant. I just pay outside lights. And it's standard for tenants to pay utilities except water and sewer. 

Year Built: 1902 - anything significant about this?

They have gas forced air. And the roof was replaced 7 years ago. 

Thoughts? 

I confirmed water/sewer and that's reasonable. 140/month .

@Steve Candor  

How old is HVAC system? What condition is it in?

Is this your first four plex? If so, I think you might be surprised how much more property managements presence you'll need, especially for property built in early 1900s.

@Account Closed  Yes, it will be my first real apartment I own. 

I haven't checked the HVAC and the age. But that's 4 boilers and 4 furnaces (so could be pricey). I'll know in a few days when I go and do my walk through. 

I really hope it's not a lot of maintenance stuff. I'm hoping most of it just minor details that the super can handle. 

@Steve Candor  

Make sure you budget significantly higher expenses to address HVAC.  Also, you may have to move in or get tenant/manager.  

For various reasons, I would not take on a 4 plex as a first investment.

But, if you go through with it, please follow up and let me know how it goes.

@Account Closed  What's the biggest reason? I could always hire a management company if need be and I have family that are supers in the area.  

I just thought a 4 family would be better than a 2 family or single family because if I have to replace say the roof. It's not 4 roofs that need to be repaired. Lower expenses and more income on a per unit bases. 

at asking $145k it's $36,000/unit.  Am I looking at this wrong? 

@Steve Candor  

There are 2 big reasons...

(1) property management challenges (single family & large multis are easier). 4 plexes do not generate sufficient income

(2) fourplex properties attract 4 plex hassle tenants

@Steve Candor  

Why is the sellers selling?  and I'm not asking about what he told you. I'm asking about the real reason that he's selling based on all of the information you gathered.

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