Should my client buy this Triplex?

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Bob Prisco · Answer

@Amber Rose Kandarian why ? I would not touch it. Now if that market is expected ( you never know 100% though )  to appreciate 20- 30 % over the next couple years well, maybe just maybe. But on the surface I would not waste my time. 4% cap. Also one good size repair, and bam you are losing money.  I will not buy anything under 20- 25% net caps

Good Luck

Joseph Firmin · Answer

Hi @Amber Rose Kandarian, The expenses seem low, but not knowing your client's goals it is tough to give an answer. If they are looking to get into this area and house hanck their way into real estate investing, this might be a good one. I'm unfamiliar with the area and the appreciation. If they can cover their mortgage or even be out of pocket some of it, it could be a good investment. They would need to buy it right though - at a discount, so they could build equity quickly and perhaps refinance later and pull cash out to continue to invest.  On the surface, it doesn't look bad - with the caveat that they are just looking to cover their mortgage. As a straight investment, the ROI is too low.

Tim Herman · Answer

@Amber Rose Kandarian Does your client mind feeding the alligator? This would be a strictly appreciation play. Since you don't have the size of the units I will assume they are 1000 sf each. The life span for floors in a rental are 8 years. Using lvp as a replacement it cost me $6 sf. 3000 sf *$6 sf = $18000/8 years/12 months in a year= $188 per month foe floor capex. You would also need to budget for roof 25 years, hvac 20 years, appliances and hot water heater 12 years, painting 3 years, etc. You might also increase your repair budget. PM for 6% seems low especially with rent up fees. Most likely be over 10%.  Your client will be getting negative cash on cash. If he puts into a money market he can get 2% with no tenant headaches.

Dennis M. · Answer

Sure is a sunny bright day there . The photo cropping Looks ridiculous to me

Amber Rose Kandarian · Answer

Thank you guys.  Appreciate all the knowledge. It is interesting it is a flip the investor bought the place for 1.2M and fixed it up and now wants 1.499M We offered a lower amount to make it all work and the investor said no, it's still on the market, next...

Frank Geiger · Answer

Dropping $225,000 for $100 a month in cash flow....maybe not even that with the low expenses. There are way better investments out there. IMO no your client shouldn't buy it.

Gaspare U. · Answer

How are you getting a 30-year loan for 3.2% with 13% down?

Should my client buy this Triplex?

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