Increase investment in C/D class triplex?

[Corey Smith]

I am one of 4 partners in a triplex deal which includes 2 adjacent empty lots. Im considering buying out one of the other partners to increase my share but unsure if I should put my investment into a deal in a better neighborhood or back into the triplex. This is a C/D neighborhood because from the property I can view a trailer park, the house across the street is in disrepair with disruptive tenants, but the neighborhood is also fairly quiet with lots of big trees. It is located on the East coast of FL 1 mile from the river.

We purchased the triplex 4 years ago for $100k(including repairs) cash. Every year there has been some kind of large expense(roof replaced, AC replaced, etc). We have completely remodeled one unit. Our last few years net income has been $13k, $11K, and $8k. Total rents have been raised and now total $3000/month.

The one partner who is willing to sell said he would want $50k for his share(initial cash input $25K). I think he would probably even be willing to do seller financing.

We have finally turned this into a good cashflow property but again it is not in the best neighborhood. Looking for advice to see if I should put more capital into it for cash flow, or look to finding a different deal altogether. In general housing is very expensive in my area and difficult to cash flow. Thanks for any advice

[Chris Davidson]

@Corey Smith to me it sounds like you don't have the time or desire to go out and find another deal. So the next step to me would be if you think it is worth putting more money into the deal. With out knowing the gross rents in the prior 3 years its hard to back out NI. But off the prior 3 years NI would be $3,250, $2,750, and $2000. Thus averaging 2667/ year historically. If you didn't expect that number to change then you would be looking at ~19 year payoff just on cashflow or roughly 5.3% return on the additional 50k. This excludes any equity build up through appreciation, and loan paydown. 

Based off this it doesn't seem to be a great deal, but one that is just convenient. Since you know the gross rents during the prior years project out what you expect NI to be this year and see if those numbers make sense to you. All the above is the most basic run down. 

If you have a plan to sell off the empty lots and recoup some funds that could really change the deal but what does your agreement/ plan with the other two partners?