Owner Occupy Triplex Deal Advice - High End

[Rob Randle]

Hey guys I'm looking for some feedback on a triplex that I am looking at.  I believe this is a good deal and want to ensure that I'm not missing anything, plus i have a few questions.  I will be occupying the smallest or second smallest unit in the property.

Area: High End Area, SFH's that are 3/2 or 4/2 are mid 300's to 400k.

Financing: FHA 3.5% down at 3.75% interest rate

Units / Rent: 1br / $950, 2br / $1200, 3br $1500 (currently rented for slightly under those numbers but they haven't been raised in 3 years)

My max offer on this possible looks like 370k with 10K back in closing costs

Down Payment + Closing Costs(5%-10k back) = 11,100 + 8500 = 19,600

Cash Flow = Rent - Mortg - Insurance - Tax - Maint(10%) - Vac(5%)

3650 - 1665 - 100 - 880  - 365 - 185 = +455

Cash on Cash = 455x12 = 5,460 / 19600 = 28%

I'm new to multi family homes, I have one investment property currently. Any advice on this deal would be helpful. I'm sure CAPEX will come up, however this is something I don't quite know how to factor it in to the numbers.

Questions:

1. How are we getting an accurate appraisd value when multi family homes in the area are scarce?  I want to ensure that I am not buying over market even if I am cash flowing nicely.

2. Whats the best way to bill tenants for water in a multi unit?  This is not an expense that I want to take.

Any additional thoughts would be helpful!