What do experienced investors see in this listing?

Question

Curious as to how an experienced real estate investor would interpret the following listing:

"Charming Triplex located in the heart of [AREA]. Very low maintenance Triplex with excellent long term tenant which have each been at the property for over 15 years. Tenants are paying well below market rent. Potential to increase rent by 45% from current rent. Super Hot Area for new development opportunity in one of [AREA's] Hottest Neighborhood. Close proximity to shopping, restaurants, schools, parks, public transportation, and freeway."

As a novice, I read the underlined parts as

low maintenance = hasn't been maintained or tenants are easy-going

long term tenant which have each been at the property for over 15 years = property hasn't been updated/renovated in 15 years, so expect to pay a lot of renovations

Tenants are paying well below market rent = rent hasn't been updated; these "low maintenance" tenants will most likely leave if I raise the rent by 45%.

Would you agree? Am I missing anything? Would love any additional insights.

Thanks in advance!

John Warren · Answer

@Michael Hunt these are all standard things to say in a listing. Most owners end up with tenants who are well below market rent because it is much easier to self-manage a property (and potentially more lucrative) if you don't have a bunch of turn over. The danger point comes when the Capex items loom, and that is when a lot of long term owners decide to sell. That doesn't mean this is a bad deal though. Every building I have ever purchased has had rents significantly below market, and that is the opportunity I am chasing in my deals.

Eliott Elias · Answer

Don't get caught up in the description. See why it's under rented, why maintenance is low, how much money do you have to put into it to raise 45%?

Steve Cooper · Answer

How long on MLS ?? Might tell you underlying factor's as other's pointed out.

Nicholas L. · Answer

@Michael Hunt if it's listed on the MLS, it's probably not a good deal.

Post the numbers here if you want a more detailed review.

Randy Gutierrez · Answer

Seems pretty straight forward and typical to me. Yes, long term tenants will most likely mean an outdated unit but on the flip side that gives you an opportunity to add value to the property. Low maintenance just appears to be sales jargon, MF's tend to have a bit more maintenance than SFH's. As previously mentioned, look at the big ticket items, it's possible these haven't been updated in a while. Also do your due diligence on the "45%" figure, agents at times can inflate numbers to make it look like a more lucrative deal.

What do experienced investors see in this listing?

What do experienced investors see in this listing?

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