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Example: Fourplex Property Deal

So the question is, how do you go about purchasing a fourplex as an investment property? We're here to help, take a look at the example below. Here's an example of a four-plex purchased as an investment property.



Las Vegas, Nevada
Offered at $615,000

Status: Active
Type: Residential
Lot Size: 4576

Three units are rented. Two tenants have been there for more than 20 years. All tenants are month to month. Washer dryer, refrigerator, stove, dishwasher in all units. Minutes to the strip, airport, and UNLV.

Yearly Operating Income: $34,380
Vacancy: 5.00%
Gross operating income: $32,661
Yrly Operating Expense $6,800 = Net Operating Income $25,861
Cap Rate: 4.21%
Gross Rent Multiplier: 17.89%

Rough Numbers:
Down payment:
Loan amount:
Property tax rate:
Expenses: % of gross earnings
Appreciation:

Loan amount:
Interest rate:
Loan term:
Annual tax:
Annual insurance:

Monthly Principal + Interest:
Monthly tax:
Monthly insurance:
Total monthly payment:

Interest payment per year:
Mortgage payments for the year:
Principal payments for the year:
Per year appreciation growth:

Gross income:
Operating expenses (managing property, landscaping, insurance, property taxes, painting - there are fixed and variable expenses):
Loan payments:
Cash flow =

Link

Notes: A duplex or fourplex is a good property for a first time investor, since you can live in one of the units and rent out the others. Also, there's the potential to keep all of the appreciation and avoid paying a capital gains tax if you live in the property for two years.

Keys:

  • The loan rate will be different if you live in one of the units versus if you don't - owner occupied.
  • Factor in vacancy rates
  • Research area to gauge demand - perhaps buy a duplex near a college or large company with a big demand for employees


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