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Updated 6 months ago,
Does this Triplex make sense for my 1st deal? (WISDOM Wanted)
Hey BP family,
I am new to real estate investing but would love some experts insights so I don't get burned on my first deal
This is the property: https://www.zillow.com/homedetails/724-N-22nd-Ave-Bozeman-MT...
My thoughts are my wife, 8 month old and I could live in Unit A for a year or two while we rent out Units B & C to help cover the mortgage payments until we build/buy a more desirable family ranch home with min 10+ acres which we've been looking for but have yet to find.
My hesitation is I've never been a landlord and am reluctant to get in over my head with property problems while simultaneously growing an online business and being a new father.
After some negotiation we counter offered 895k with a 2-1 rate buy down for 20k and the sellers have verbally accepted but since our offer expired we need to resubmit. I am now considering reverting back to our original offer of 875k with a 3-2-1 buy down at 36k but am not sure they would go for it. However they haven't had any other offers and it has been on the market for roughly 70 days.
At the accepted offer rate our mortgage would estimated be:
Year 1 - $5231
Year 2 - $5750
Year 3-30 - $6292
Each of the 3 units would rent for an estimated 2-2.5k totaling roughly 6k-7500 per month in income depending on what we can rent each unit for.
So with all that being said, conservative numbers the triplex would cashflow roughly 1k per month assuming we don't live in it and have all 3 Units rented.
That seems like razor thin margins, especially when factoring in expenses so my question is:
What is the cash on cash net return per month you would look for in a triplex deal like this?
Thanks so much and I truly appreciate any and all insights!