First House Hack Deal

[Omar Dolmus]

Hello all,

I've been looking at this triplex, and leveraged the BP's rental property calc and it shows me that this has potential to be a great deal. I was able to get a lot of the numbers from the seller so it makes for a more accurate underwriting. The current rent the seller has is significantly below market with the avg rent in my market for a 3/1 & 2/1 being $2k+ and a 1/1 being $1,850. The seller informed me all tenants leases will be up by the end of this year. From my knowledge this would be a great value add and could possibly generate a 20%+ CoC ROI after I move out and lease the last unit. What I want to know is am I missing something? This seems too good to be true.

Side note: It has a newer roof and Unit 3 was recently renovated.

Here are the numbers:

• Purchase Price: $460,000
• Interest Rate: 6.3%
• Down Payment: 3.5%
• Rental Income: $3815
• 3/1 Unit 1: $1365
• 2/1 Unit 2: $1300
• 1/1 Unit 3: $1150

Expenses:

• Mortgage: $2,748
• Property Tax: $687
• Insurance: $139
• Garbage: $125
• Water/sewer: $137
• Maintenance (4%): $216
• CapEx (6%): $324
• Vacancy (8%): $432
• Management Fee (8%): $432

[Aaron Zimmerman]

What kind of area is this? 
Do you have the copies of the most recent leases? If no, obtain. 
what rehab do you need to do to get the units to market rent? What rehab do you need to get it to A more livable standard?

property taxes - what are they assessed at? What is your purchase price? If there's a significant delta, then you can expect to pay more

maintenance is a little light. Vacancy could be a bit less depending on the area. Same for capex