Author Topic: rental opportunity 4 plex  (Read 1821 times)

Mr Mark

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rental opportunity 4 plex
« on: July 02, 2013, 09:00:19 PM »
I've seen a renovated 4 plex, 3 units rented for 500 a month, they pay utilities. Tax around 3k yr.

Asking 135k

?

arebelspy

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Re: rental opportunity 4 plex
« Reply #1 on: July 03, 2013, 06:19:53 AM »
What's the area like?  I turned down a 4-plex with similar stats here for 98k because the neighborhood wasn't to my liking.  That was a year and 1/2 ago, now similar four plexes are going for 170k or so.

The hassle factor on properties like these can be quite a bit higher, so make sure to factor that in.  And properties like that are why the 2% rule was made (1% rule on SFRs).  I'd try to get it closer to 100k, if possible.

But overall it may not be a bad deal, but again it goes back to neighborhood, for me. (Assuming - since you mentioned renovated - no major deferred maintenance.)
« Last Edit: July 03, 2013, 10:12:28 AM by arebelspy »
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Mr Mark

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Re: rental opportunity 4 plex
« Reply #2 on: July 03, 2013, 08:00:45 AM »
It's in a part of town that's in the process of ... civilising, I guess. (As I wouldn't say it's gentrification). We're talking Detroit here.

So lots of youngsters, 20s to 30s, growing restaurants, bars, businesses nearby. But limited scope for big capital growth medium term.

Might be worth giving someone half price rent to manage the property, because as you say, a 4 plex in this part of town sounds like a lot of hassle.

mpbaker22

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Re: rental opportunity 4 plex
« Reply #3 on: July 03, 2013, 10:48:37 AM »
Have you done this before?  Are you considering living in it?
One of my big factors in my search is I could live in one unit and have guaranteed "income" of $350/month in that unit.  As opposed to the risk of empty apartments, people who don't pay, etc.  Ultimately, this shouldn't change the price you're willing to pay, but it removes some of the risk.

Daleth

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Re: rental opportunity 4 plex
« Reply #4 on: July 06, 2013, 12:34:33 PM »
Those numbers look great--if three units are renting for $500 and the fourth unit is basically identical, that's $2000/mo income potential (meaning any price under $200k is pretty good) and a $135k price. My only hesitation is what kind of people you can attract to the location. What's the parking, public transport, crime rate, local businesses, etc. situation in the immediate vicinity? And then of course long term... well, I guess it's hard for Detroit to get worse, right? You're sort of getting in on the ground floor.