Brand new triplex.. invest or avoid?

1 Reply

Hello BP community, I caught wind of a brand new triplex that's not completed yet (should be in 20-30 days). It's listed at 199k. I'm thinking I would offer 210-215k. After accounting 30% towards vacancy/property mgmt/capex/repairs&maintenance, plus a quick assumption without having received numbers from my lender yet (although have received numbers in the past so have a good idea what the other expenses would be), it looks like I could potentially cashflow $201/mo with each door being $650/mo. It would be $43k down not including closing costs (approx 4-5k). Does this seem like a wise investment? I do not own any properties at this time. Thank you in advance for any input!

Is there a particular reason to come in over list price in your market? I don't know your market so perhaps multi-families are a hot commodity. I would be offering asking, if not a little bit less and negotiate from there. In new construction, it's unlikely that they're going to budge much on inspection findings, etc. Let's assume you get it for asking and run your numbers:

Purchase price: 199k

Downpayment: 48K (including closing)

Estimated monthly payment (30 year @ 6%): $911 plus taxes and insurance so let's say $1100 conservatively

Rent payments assuming full occupancy: $1950 - 30% vacancy, repairs, and CapEx so that's ~$1365

Net rent is $265 assuming you're fully rented. 

Again, not knowing your area, I feel like I could probably get this easily on a single family. I would be looking for a better cash flow on a triplex. I'm looking for a single unit to cover my mortgage payment with the rest for expenses and cash flow. Give us a little more info on your area, how you figured your rent, and how you broke out your expenses and we can probably be of a little more assistance.