Help me analyze this deal!

[Sam Ohanesian]

So I've had my eye on a detached triplex. It is being sold by owner. He has been trying to sell it for over a year now! He is very unwilling to negotiate on his price, he wants 317k for it. It is located in a very good area here in Tucson close to the U of A. 

In order to cover the downpayment of 85,590 i plan to use a heloc @ 6% intrest. The mortgage with the 25% down is going to be somewhere in the ballpark of 1550. With a heloc payment calculator I'm guessing my payments will be around 540. So my cost to own the property each month will be $2090.

The property is composed of 3 seperate structures. A 2/2, 1/1, and 1/1. Im thinking, conservatively, I could get 1200, 850 and 700 for rent, coming out to 2750 per month. Again, those numbers are very conservative and I think i could get much more. 

figuring out the cash on cash return was a little difficult due to the heloc, the place does need some money put into it, and the uncertainty of how much rent I could get. But I came up with it falling in the 9-11% range. 

the market here is extremely competitive and there isn't much worth considering out there right now. My concerns for this place is having to use a heloc just to cover the downpayment. My entire heloc will be tied up in this place so I probably wont be able to do anymore deals anytime soon. 

Really going back and forth over this one. If anyone with some good experience could message me and help me out I can share more specific details on the deal. 

Appreciate it! 

Sam

[Brian Kimminau]

I think your rent numbers are off -at least how I would see it. Although my 4 2x1's + 1 3x2 are midtown, they are under 3 miles of UA. I would adjust to 900 for the 2x2 and 600 for the 1x1's. Possibly 800 and 550 if no backyard/no pets/no a/c and not in SAM Hughes or on University or on 4th Ave. These are my conservative numbers I would use: 

2100 gross monthly rent or 1900 gross monthly rent (no CAP #'s as more info would be needed). Student housing will likely have higher than regular expenses in the turnover costs and repairs. Downpayment at a variable rate and covid schooling makes the numbers slightly tougher to calculate. I really think you could do better in Tucson. Plus, how much value could you add to a top of the market price? I rarely find a property that is close to working around the UA but I know plenty of people who do with heavy off-market marketing. I shoot for ~70$/sqft as a starting point and love 85716/85712.

I am not trying to put the deal down or you, at all, I am just trying to apply my opinion to protect your money. You can make yourself much money here, I promise!