Deal or No Deal? Potentially second small multi-family w/ numbers

[Ryan Hall]

Potentially my second small Multi-Family in very hot market (Ada County Idaho, basically Boise and surrounding suburbs). 

Would you invest or wouldn't you invest? Please explain.

Location: right next to a nice University

Triplex condition: 7 yrs old in very good condition (all major systems in good condition).

These are Real Numbers, please excuse the spreadsheet, I'm an engineer: 

Just looking to expand my knowledge base so no wrong answers and please don't hold back.

Appreciate your input!

[Joe Villeneuve]

I'm going to echo what everyone else said. Bad deal...not a poor one, a BAD one. 2.5% COCR is awful. Even though it is better than that in reality when you add the subtracted $200/month for repairs/CAPEX/etc...(why do this? What is $2400 a year going to cover in this area? This is why using % for analysis can only result in illusions).

Using % for analysis means nothing, and it usually results in nothing but illusions (there's an echo in here...I think in addition to the one I mentioned in the beginning).  Here's another from this deal property example why:
1 - 2.5% (whatever that means) CoCR
2 - Here is what it really means.  CF of only $200+/month, or about $2700/year...AFTER, you spend $114k in cash.
3 - What it means = It costs you $114k to buy $2700/year.  

4 - Put another way. You don't make a profit until you recover all the cash you put into a deal. Combining #2 & 3 together, it means it will take you over 42 years (not a typo) before you recover your cash and start making a profit...assuming you never have to spend more than $2400 a year on repairs/CAPEX (sure...that's going to happen).

Stop using "%" as the conclusions in your analysis.  It does nothing but mislead you.  Use the actual "$".  Percentages are for the Stock Market...leave them there.

With that same $114k in cash, in one of my markets (and many others), I could use it as a DP (20%) on 5 - $100k properties (and keep $14k in CR), with each property having about $4k in CF/year.  That's a total CF of around $20k/year, and I would have spent less than you did on it.

Using the same analysis formula, it would take me only 5 years (not 42) to recover my cash.