Bought my first 3 family

5 Replies

Our company sold our first SFH rental for about 16k profit and reinvested that into a 3 family of 2 bed/1 baths. Each floor is about 1,000sqft with separate utilities other than water and sewer. Building was fully occupied and in good shape when we closed. Very cool, NYC feeling building.

Purchase price: 80k

Down payment: 20k

Closing costs: 2k with 2k in prepaids

Gross rent: 1600

However the 5th came and went with no rent and I feared three evictions. Posted the notices and with some calls now have all the rent. I think the old landlord wasn't very strict  and the tenants need to be trained. 

I see this building renting for 1800 to 2000 at market rent and with some sprucing up value could be increased to 100 to 110,000.

Congrats on getting the triplex!

Did you get a copy of the lease agreements from the prior Owner?

Are the tenants on a month to month lease?

After paying late fees for a few months, maybe a Tenant will choose to leave and then you can go in and update that Unit so you can charge more rent.

I got leases, expenses, and estoppel letters but the place was so poorly managed that it didn't matter. For example, 1 out of 6 lights in the common areas worked. Just needed new bulbs. He tried to not fix anything from the sound of it. There are refrigerators only getting to 50 degrees. If course nobody said anything until now.

But it's all good. We'll be under 1k of expected but unknown at the time expenses. 

Leases are 12 months that are up in the fall. I think I have them straightened out and there won't be many issues going forward but we'll see. I would rather everyone stay and get $25/month increases each year until I reach market. A month vacant with improvements is expensive.

Some of the other problems were just laughable. The furnaces only had the intakes and exhausts stubbed out, not elbowed up and down with separation. What kind of "professional" does that. Took me maybe 4 minutes to fix including cutting pipe.

Some real half effort work and the tenants seemed to really appreciate the right fix.

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