Deal analysis for my first offer.

[Neil Adams]

Hi ladies and gentlemen. Would like advice on a deal evaluation. My first offer on a triplex. Private financing from a somewhat experienced investor who has done a couple flips and a couple rentals. I am bringing deal and sweat equity for 40% of our first deal together.

Legal triplex 816 sq ft. I know it seems small. 2 studies and a 1/1. County tax assessor says 1068 adj sq ft.

Offer price: 240k

Repairs needed minimal. Partially rehabbed already. One unit still needs work. About 15k to bring to good condition(nothing elaborate as market wouldn’t support)

ARV: around 280

25% down plus 15k repairs= 75k out of pocket cost

Current rent:

unit 1(studio) $795/mo

Unit 2(1/1) $850/mo

Unit 3(studio)- assume also $795/mo

Total rent after stabilization: $2,440/mo

Taxes 440

Insurance 200

Principal/interest: 759

PITI: $1399

Maint: 5% $122

Capex 5% $122

Vacancy 10% $244

Property management myself, as I am the sweat equity partner with none of my own money in

Net income 2440

Monthly expenses 1887

Cash flow: 553

COC RETURN on 75k: 8.8%

Brrrr method: 75% refinance conservatively instead of 80%: 210k back from 180k loan. 30k in cash back in investor pocket. Instead of 75k out of pocket, 45k out of pocket after refinance.

New principal and interest: 885/month

New cash flow, down to $427/month

New COC RETURN on 45k left in the deal: 11.8%

Anything I’m missing?

Go/no go?