1st Triplex Purchase - Help Please?

4 Replies

I am very new to REI. I have read some books and read articles on here as well. I am looking at a first purchase which is looking strong. I wanted to ask what (other numbers) I should be looking at. Here is what I have so far:

Listing price $225K in a strong rental market. 2500 SQ FT. Owner has listed this property 3 times prior and lives out of state. Listing agent told my agent that "if he has an offer with a 2 in front of it he'll probably take it." Comps don't necessarily support $225K as a 4 family down the street with more square footage that sold for $194K.

Unit 1: 2BR/1B rents for $900 (downstairs) - I would live in Unit 1, fix it up and put in a W/D.
Unit 2: 2BR/1B w/ W/D rents for $800 (upstairs)
Unit 3: 1BR/1B rents for $700 (upstairs) and has balcony access (as does Unit 1)

Total Taxes: $5811/yr
Insurance: $1111/yr
Miscellaneous: $4838/yr

Mortgage payment would be approximately $1800 as I am doing FHA and escrowing taxes. I had my agent (owns properties) and a good friend (also super handy and owns rentals) look at structure/foundation/roof/etc... They say all the big things look good. They think it's a good deal at 200K.

Rents have not been raised in a while according to my agent and he believes with a little work each unit could get $100 more per month. Public sewer, public water, off-street parking.

What other information do I need to properly assess this deal and what feedback might you have for someone like myself (new to this process, not handy). Thank you for your insight!

Without writing anything down and figuring off the top of my head, I would say this deal is cf negative. Also don't count on that appreciation until it arrives in your bank account. Put it in the calculator on the forms tab and it will help you.

A lot of people here know a lot more than me, but it don't think it looks great deal wise, unless you really want to live there and love the property.  

Did you run it thought the BIggerpockets potential rental property calculator in the resources tab?

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