Theirs is a four plex for sale in my area for $95000 and three units are rented for $600 per month. I want to make sure i’m analyzing the property correct. So here is my example.
$1800 A MON X 12 X 50% for expenses x a 10% cap = $108,000
sounds like a deal
If you had all 4 rented for 600 that would be $2400/month gross. That is 2.5% per month. 30% per year before expenses. Very nice.
Prowe,
No matter how much you calculate the NOI and then capitalize it, a 4 plex is not priced that way. It is still a residential property so the value is determined by the comparables like 1-3 unit properties.
Sounds like a good starter if its in decent shape, and your numbers/formula are off a bit, but I like how conservative you are being with 50% for expenses.
Like John said, value is determined by comps, but if this thing is in a decent area, you are in good shape at well under 40 times (potential) rent. Its amazing what you can pick things up for right now.