What would you pay for this 3 unit

Question

Single family home in a C+ to B- area. Property consists of 3) 2br units that are all a large self contained, 1100 sqft each. Property is completely renovated and all units are individually metered for all utilities except for water/sewer. Very nice renovation with all new major mechanicals and interiors including laundry in each. Rents in the area are solid at $900-$1150 for a 2BR of this type. I have other 2br townhouse units in this area and i am getting these rents.

With a possible gross rent roll of $3450 per month whats the max you would pay for this property using market rate financing to get a nice return?

Audrey Ezeh · Answer

3units is residential so you should be able to get comps for that. If you use the income approach you might pay more or less than it is worth. If 1% is a great deal in your area then you can pay $345k for it. You run a CMA and similar triplexes in that area sold for $280k...you can see how that is a problem. Get the comps then use the income to see if it makes sense.

Ryan Lee · Answer

It depends on your current situation and how hungry you are for a deal. I like to be very patient for deals and so for that I would probably want to see the max purchase price around 350k. Obviously the lower the better, but I think you can get decent financing and still be able to cash flow decent at that price range.