Triplex opportunity - do these $'s really work? ADVICE PLEASE

[Rae Bryant]

Hello BP community - this is my first forum post :) After several sleepless nights I decided that it was time to turn to the professionals for guidance!

My initial REI plan was to BRRR however I came across an MLS listing for (2) turn-key Triplexes that are on adjacent lots. Met with the owner/agent and now I am second guessing. I cannot decipher if these $'s really work or I just want them to.....

PROS:  Owner has property managed the units himself for almost 30 years and stated he will 'be around' after the sell, knowing I am a newbie.  Seems to be fully transparent with history about units and tenants.  

Location - 15 Minutes from Downtown (state capital) - County has more than 1 million residents - County growth +21% last 10 years - 36% of households rent their homes.

Owner has offered to sell me (1) Triplex this year and the other next year. - Gives me more time to find 25% down-payment and helps him on taxes (per his accountant). Each Triplex down-payment = 1/3 of my cash on hand.

Units are 2 bed/1.5 baths with their own utilities.

CONS: Owner has valued tenant longevity over keeping units at market rates so increase of between 3 - 8% needed to match current/desirable rates. Known CAPEX = $12,000 w/i next 3 years for (2) new HVAC units.

Numbers below do NOT include Property Management Fee. Units are 30 miles away from my home.

FACTS: Current rents /offer $ = $145 Monthly Cash flow per door / Proforma Cap Rate 6.16% / Cash on Cash ROI 5.33% / Purchase Cap Rate 6.16% / 50% RULE -$211.80 Monthly Cash Flow

Market Rates (conservative)/offer $ = $167 Monthly Cash flow per door / Proforma Cap Rate 6.36% / Cash on Cash ROI 6.16% / Purchase Cap Rate 6.36% / 50% RULE -$126.80 Monthly Cash Flow
Thank you for your honest evaluation and expert insight on this - MUCH APPRECIATED! 

[Sean Mcevoy]

@Rae Bryant I just read the post again. If you are a newbie buying off the MLS I would say hire an agent to help with the process. Hiring a good agent is a whole other discussion but real estate transactions have lots of moving parts and you want to make sure someone is there looking out for you if you don't know what you are doing. What is the breakdown of rents, expenses, taxes, insurance, and the purchase price. That info can give us a better understanding if the numbers work.