Should I buy this...?

[Chad Duncan]

I am looking at a property that is a bit odd. It has a triplex and a sfh on the same lot. It's On the market for $330,000. 

The rents total up to roughly $2500 per month according to the seller. I have a loan pre-approval at 3.25% for 30 years. The properties taxes per year are roughly $2,000. The property is distressed and needs a good remodel into the 21st century. 

Do you think, with the numbers shown here, if this is a good property to possibly buy? (I know it's a vague description, any pointers help.)

If I offer, how should I approach and with what number? I am intrigued as to how you come up with the answer as well. It will be a property for renting and be apart of a buy and hold type investment. 

Thanks 

[Gregory H.]

Throwing this into my REI calculator with the following assumptions, I'm getting a 5.8% cap rate. Purchase price - $330K; Rent - $2,500/month; Taxes - $2K/year; Insurance - $1K/year; Maintenance & Repairs - $3K/year; Vacancy - 5%; Management Fee - 10%.

Even if this were Class A property, which it probably isn't at $80K/door, I wouldn't go for it unless you can get significantly below asking (like $280K), or think you can pump the rents up significantly post-renovation.

Now, you have access to some pretty fantastic financing if you can actually get 3.25% for a 30-year, that's like prime minus one-half. So I would look at as many properties as possible, as soon as possible so that you don't let financing terms like that go to waste.