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Updated over 7 years ago on . Most recent reply

User Stats

9
Posts
3
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Antone JAmes
  • Real Estate Professional
  • Washington, DC
3
Votes |
9
Posts

Deal or No Deal for a Triplex

Antone JAmes
  • Real Estate Professional
  • Washington, DC
Posted

Greetings,

The deal (Triplex, 3-unit)

VA financed loan (no money down!)

purchase price- $400,000 @3.375%

property tax- $1200 Annual

Insurance- $1000-1200 Annual

Utilities $3600 (water only) Annual

other cost ($200) Annual

vacancy 5%

Property Management- None

Income $3300 ($1100 each unit)

1st year occupied by me (VA requirement) cash flow -$126

2nd year occupied without me cash flow +$841

Most Popular Reply

User Stats

1,425
Posts
1,481
Votes
Cara Lonsdale
  • Realtor and Investor
  • Scottsdale, AZ
1,481
Votes |
1,425
Posts
Cara Lonsdale
  • Realtor and Investor
  • Scottsdale, AZ
Replied

There is a 50% rule for a reason. I think you can be more flexible on SFRs, but when dealing with multi-units, you stick to those rules because they usually ring true. You haven't accounted for reserves, which should be based on EACH unit. Also, what about repairs and CAPEX? What about the grounds, landscaping, parking? Are you responsible for paving the parking spaces?

Everything you will have in expenses is times 3!  You are playing to close in my opinion.  All it takes is 1 HVAC to go out and your budget is BLOWN.  And if you have Tenants, you can't just tell them that you have to save up for it.  It has to be fixed ASAP.

I wish you the best of luck, but I just think that your estimations of things are BARE BONES, and do not account for the many unknowns that can come with rentals TIMES 3!  I'm just scared for you, that's all.   It's a risky investment for your first one.

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