Would appreciate comments on the following 4 plex opportunity in pretty good neigborhood in the Chicago suburbs. It is about 24 years old, has separate electric forced air heat, 4 car garage pretty good shape but will eventually need updating of some of the central a/c's, stoves, fridges, contertops, carpeting, etc. Some of the electric hot water tanks have already been replaced. I will pay the water. 1 year leases on the units, 1, 3 bedroom, 3, 2 bedroom units.

I would appreciate any comments/questions. Thank you.

Assuming 20 years at 6.75%, your PI is 1612.41 on 210K financed. So your annual mortgage expense is 19348.02. Since you claimed 24K after expenses (before mortgage) now you see that number become about 4.6K. When you put up 90K, 4.6K is under 5% return.

If you get 30 years at 7.25%, then you are at 1432.57/mo for 17190.04/yr, giving cash of about 6.2K for a return of 6.9%.

Now, if we give you a 95% average occupancy factor (5% vacancy, which is a low number, especially for a smaller property) then that knocks $1700 off the income, which in the first case leaves you at 2.9K and in the second case leaves you with about 4.5K annually.

The deal is skinny. I am not suggesting that it is undoable, but look at the downside before you decide. When you go out with Rosy Scenario, you have to consider the possibility that Rosy will ditch you over the course of the dance.

You need to decide what the risk factors are, how likely they are to come about, and how you will handle them if they do come about.

About the Author: Jim Locker is a technical guy who has done a lot of real estate investing and landlording. The experiences he writes about and advice he gives are either first hand, or in answer to specific questions posed by others. He is commonly known as jiml8 around the internet.