Buying 3 houses...how do they sound?

Question

I'm buying 3 turnkey houses from another investor and closing in a week or two.

All 3 are tenant occupied, needs ZERO work, in great shape.  Nothing major is needed in the near future like bad roof, AC, etc. so I should be walking into a good situation. They all have ceramic tile in all rooms except bedrooms. Kitchens were all updated.

Tenants have all been vetted and paying their rents. Using the 50% rule, I've come up with these numbers

House #1: Purchase: $57k, Rent: $800, CAP Rate: 8.38%; very long-term elderly tenants

House #2:Purchase: $43k, Rent: $800, CAP Rate: 11.09%; tenants been there 1.5 years (roommates with a double security deposit on hold)

House #3:Purchase: $60k, Rent: $900, CAP Rate: 8.96%; tenants been there 4 years

Just wanted to get your thoughts before I close.  I feel good about them

Robert L. · Answer

I asked the same thing myself. He says he's been in business 25 years and wants to retire since he's been landlording full-time and wants to have a 10-year plan of selling off his 58 homes.  I came along, cherry picked the best ones, had full inspections done, and also carefully considered the tenants who are already in them--all long-term tenants.  I normally wouldn't do so many at once, but this was a good turnkey setup to cashflow right away with no work, so I went for it.

Robert L. · Answer

Yes, I am

Shannon K. · Answer

I'm curious... why is the seller selling? If they're all a slam-dunk, why isn't the investor keeping them for himself?

Robert L. · Answer

I bought these houses.  There are no expenses--landscaping, pest control, utilities, etc are all responsibilities of tenant.  I allocated property management but I've been doing it myself.

Jordan Thompson · Answer

What expenses does the owner have? Landscaping, Property manager, utilities,...