Hi everyone,

My name is Brad and this is my second post on BP Forums. 

I've been endlessly searching for duplex's and triplex's in Northern California for my first deal. So far I have found a couple possible listings with the help of my local Real Estate Investor friendly agent, Wes Blackwell, including this property below.

Just thought I would kindly ask for some additional eyes to look at this deal with me.

Triplex - SFH with a 2 Unit duplex on the adjacent property.

1 Bedroom - 1 Bath, roughly 900 SQ feet for each unit. Having 2 structures (with the SFH on its own property/yard) is an appealing aspect of this deal. The SFH will definitely have more upward potential for rent.

Purchase Price - $260-280k

I'm always jealous when I hear some of the low prices that are referenced on the BP podcasts & forums. The high prices are a hindrance here in California, however I feel that if I can make things work here (in CA), I will be able to succeed in other states in the future. 

Down Payment - 20% - $52,000 / $56,000

30 year conventional. Interest rate around 4.5%

Estimated Repairs - $12,500

Estimation, as this is my first deal I still have a bit to learn about this side of Real-Estate investing. Also, have not even SEEN the inside yet. This can go upwards or downwards from this figure (most likely up). I have the resources to either complete many of the repairs myself or with family connections. 

ARV - $340k

(Will have a more accurate figure soon)

Current Rent - $800 per unit x 3 = $2,400

Appears below market rent for the area. 

Based on my research thus far, the SFH should rent for ^$1150 easily with each side of the duplex going for around $1000. My goal is to achieve $3000+ per month for all of the units fully rented. This will require some repair and upgrading to achieve these prices but I am fully confident it will generate close to this. Additionally, there are strong forecasts for the Sacramento area in terms of rent prices increasing in the near future.

Property Manager - 8 / 9% of rent income - $250

I have decided very early on that I will not self-manage. I'm too nice for this job and cannot see myself demanding for a tenants payment if they request to pay a couple days over the due date. I feel as if I would always allow it (not good). Because of this, I have already found a great local source for Property Management.

Purchase Cap Rate: 9.85%

I ran all of these figures into the Rental Property Calculator here on BP, above is the estimated Purchase Cap Rate. I included 5% vacancy and 6.5% repairs/expenses. 

Please let me know of any initial thoughts that you may have solely based on the numbers. Obviously, there are a number of other factors that can affect the success or failure of an investment. After taking a look at this property yesterday, it has passed the (I would live there myself) test. The neighborhood appears much nicer compared to some of the past possibilities I have looked at.

I'm definitely excited and ready to start my Real-Estate investing career. Each time I listen to a BP podcast I find myself with even more motivation than before. 

Regards,

Brad Ward