Multi family Property Analysis (Please help!)

[Noah Kellar]

Greetings! I would love to hear some general & personal advice on analyzing a multi family property. Specifically, in this case, a quadplex. I have been doing my research through readings & the BP podcast. What a great program for someone so ready to jump in! Anyways, I found a quadplex in my area listed on Zillow. The purchase price is at $399,900 for an 8 bed, 4 full bath, & 4 1/2 bath. Each unit has stairs to a second floor. Approx. $98/sq ft & built in 1981. Now, using the simple 10% rule, this property should produce at least 4K/mon in rent, right? I haven’t spoken with the agent yet, but there are claims on the listing that there are long term tenants in place with 0% vacancies. Sounds attractive! But… why haven’t fellow investors jumped on this? Is the price too high? I would love to get started, but if my first property is a 400k purchase, I want to be absolutely sure about it. I will also mention, this brick building is right next to its duplicate (which is also listed & at same price). Tenant pays all utilities & I would do lawn care myself. The property is in a popular area & close to good schools. Listing site estimates roughly $1,700 in mortgage, tax, & insurance with 20% down. What are your initial thoughts? Call the seller for more info? FHA out of question since units are full? What other ways could I finance (BRRRR?)? Thank you in advance!

[Dave Spooner]

@Noah Kellar It's really dependent on your market and your investment strategy, so it's hard to say too definitively. The interest rate will matter though. This is an investment property so you likely won't get the same rate as owner-occupied. If you're using Zillow, they may be operating with a local rate based on owner-occupied rates.

Based on these numbers and the outcome I'm looking for (but again, I'm not in your market so take it with a grain of salt), I would probably look in the $330k-350k range for the final purchase price.

Either way, good luck! Sounds like a cool property.