Brand new 4-plex.

[Paul DoCampo]

Im looking at this brand new 4 plex that is still bing built. They are asking for $819,000, I'm going to offer $450,000. Sounds ridiculous but $819,000 is a ridiculous price to try and cash flow at.

2 bed/1.5 bath. 1100 sq ft each unit. 2 car attached garage for each unit. All utilities are separately metered. In a working class b-c neighborhood. 

Rent- about 1399 (average rent of 2 bed in area is around 1100. Pro forma rent puts it at 1500).

 (possible extra income from adding laundry but this is not added to my analysis.)

-Expenses per month-

Trash-88 total

sewer- 56

Tax-468.83 (1.25% tax rate)

PM-569.60

Repairs/vacany/cap ex-839.4 (5% of Gross rent each)

Financed at 4.75%= about $426 cash flow a month per door. At the 50% rule that equals roughly $230 a month per door. 

Now there is probably a good chance that they will not accept my offer because thereis a brand new 4-plex exactly like this one built last year next doow ,and bought for $750,000 and $300,000 down payment. But I thought i would give it a shot.

What do you all think?

[Aaron Mazzrillo]

If it is under construction in this market, you're just wasting your time, their time, and people on BPs time. If it were a stalled construction project with no activity, if it were a downward trending market, if there was recently a fire on the project, etc. I'd say yes, go for it. Never know what could happen.