House Hack Opportunity in San Jose, CA (Silicon Valley)

Hi everyone!  I was approached by a client yesterday who is planning to sell her triplex in San Jose, CA close to SJSU. I think this is a perfect house hacking opportunity for someone.

Here are the details:

List price being considered: $999,000

Unit mix: 3/1, 3/1, 1/1

Rents: Unit A $2850 includes water, Unit B $2550 no utilities included, Unit C $1450 includes water, electricity and garbage

The 1/1 is  separate cottage built probably around 1940 or so and updated periodically.  It should be renting for $1800 or so per month, but the tenant is long term and my client is generous.

The 3/1s are in a Victorian building one unit up and one unit down.  Large bedrooms and usually rented by groups of students. Often with co-signing parents.

Street parking only for all units.

Garbage runs $33/month per unit and A&B reimburse the LL directly for this expense.  Cottage has a submeter for electricity from the A unit but the electricity is currently included in rent.  Water runs about $100 every two months for A&C who share a meter.  B is separately metered for all utilities.

Rents on turnover would probably be about $3k/month for the 3/1 units and $1800 or so for the cottage.

I would budget $50k in renovation expenses over the next 1-5 years to include: termite treatment and repairs, exterior wood repairs and repainting, new roofs, minor interior rent ready activities.

When I run the numbers at current rents, I get a 5.9% cap and 12.5 GRM.

Current rents from A&B should cover a first mortgage and property taxes.  

So, who wants to house hack? Private message me if you're interested. We'll probably go on the MLS in the next 2-3 weeks....You can search Triumph Property Services on craigslist in South Bay and find the ad I put up yesterday which includes a few photos.