Hi guys, there's opportunity to buy a 4-plex in Texas, ok neighborhood. House built in 1950. Lists at 170k, trying to get in for 150-155k. It passes 1% rule, but doesn't not really passes 50% rule according to the last year rent roll (looks like it was a bad year).
So here's the rent roll for 2013:
Rent received $27000 (rents are 700, 500, 590 & 450 for 2/1, 1/1, 1/1 & studio)
Appliance repair - $90
Co-brokerage service - $300
Lawn maint - $450
Maint HVAC - $800 (1 unit was replaced)
Management fee - $2700
Pest control - $100
Plumbing repairs - $1100 (replaced 1 faucet and fixed water damage)
Rental fee - $320
Repairs & maint - $2000 (leveled foundation, repaired stairs & deck, outside paint)
Security expense - $80
Utility, electric - $4600 (should be half of this now: 2 units have individual meters, tenants will pay for their electricity )
Utility, water - $1800
Expense total: $14500
The place is supposed to be turn key with management in place. Yet I'm somewhat worried about 50% rule.
It will cashflow with 10% down with this level of expenses. After these repairs it should have positive cashflow with 0 down.
About me:
- I have never invested in RE.
- My primary investment is VTSAX so far, and I'm looking to diversify.
- I should have at least $10k in emergency fund after putting 25% down.
Comments? Advice?