Buy a 4 plex...get a duplex
I am fairly new to BP and the wealth of information is absolutely amazing. Quick background on myself. I had several rental units prior to Hurricane Katrina (yes, from the New Orleans area) and all of them were wiped out. I in turn sold all but one of them off due to the unknown of what was going to happen with the area. I kept one unit due to it not being worth selling. Fast forward 10 years later and I am getting back into REI
My plan to get started again with REI was to start with flips to help finance Buy/holds. In my process of looking for flips I came across an interesting deal. There is a 4 plex that has been on the market off an on for about 16 months. The lady that owns the property is looking to downsize the number of properties she has. It is listed at $309,000 and all four units have been rented out for no less than 12 months. 750 / 775 / 750 / 725 are the rental amounts which are a little below the average for the area. From what I calculated using the BP tool, NOI of $12,500 and CapRate of 4% ( that's low, right?). I could not calculate the cash flow as I have no idea how to finance this deal. The great thing about this deal is to help offload the property she is now including a duplex she had on the market for a while for $175,000 at no additional costs (probably because it is only worth about 100k). There is currently one tenant in the duplex that pays $845 and one unit available. I am not sure what the going rental rate for that area is.
Key note: She is only accepting cash offers which I do not have that amount of cash available.
Questions:
- Should I combine these together as being one deal and run the numbers that way or keep them separated?
- What is the best route to take to be able to offer cash? HML? If HML, how hard is it to get a bank to refinance a rental property? (I will be checking out the BRRR podcast tonight)
- This seems like a good deal but is it really?
If there is anything else I need to know please point it out.
Thanks in advance for the help.