Tri-Plex Deal or No Deal

[Caleb Godsey]

Hello BP Community!

I'm just getting started in reel estate. Been ramping up on education & learning as much as I can over the past 4-5 months. I'm starting to settle in on a specific property and this one came across my lap today. I understand everyone has different opinions and there are lots of variables in real estate, but I'm trying to familiarize myself with what a good deal looks like. 

Here's the numbers, curious everyones thoughts on if they would/wouldn't take the deal and why/why not.

Tri-Plex

Listed for $130,000, verbal offer that they would accept at $110,000

Rental Income

Unit A: $650

Unit B: $650

Unit C: $650

Total All Units: $1950

Expenses

Mortgage: $500/mo (20% downpayment, conventional 30-year fixed loan @ 5.5%)

Property Management: $195/mo

Vacancy (8%): $156/mo

Property Tax: $150/mo

Maintenance: $90/mo

Utilities: $500/mo

Insurance: $90/mo

So by my estimation, it's cash flowing for about $270/month. Realtor says the rent is kinda low and could charge about $700 per unit, but I'm trying to be conservative with the numbers. What are your thoughts on this and what realistic things could make this a better deal?

[Jared Skov]

Run the numbers on a 15yr loan with 25% down and increased rental rates, you'll get a lower interest rate and increase your chances of FI/RE at a younger age.