Analysis complete. Too good to be true?

[Keith Torsen]

Alright, big step forward for me as I've just completed my first property analysis using the Four Square worksheet.

Property is in Sacramento, CA. It's a triplex, and I would be house hacking it.

Assuming I also paid myself "rent", (so I'm looking at it as full occupancy with owner-occupied), I could get $1,000 per month per unit, grossing $3,000 per month for the triplex. It's also noted that only two units are currently rented, allowing me to move into the third almost immediately.

Mortgage is estimated at $2,097, at 5% interest, 3.5% down. All other expenses total $651.

My numbers are using 5% each for CapEx, vacancy, and repairs. If I factor in 10% as suggested usually, it has negative $500 cash flow. I didn't factor in prop management.

So that brings us to $3,000 in rent, and $2,748 for expenses. Cash flow would be $251. Closing costs at estimate of $8,000, and about $5,000 in rehab budget, total investment equals $24,375, with an $11,375 down payment

Divided by annual cash flow of $3,018, equals a 12.4% return on investment.

This is at asking price of $325,000.

Too good to be true? What am I missing, besides not factoring for prop management ?