Expert Advice My First Rental Property (Is this a Good Deal?)

[Sean Byrd]

Investment Info:

Small multi-family (3 units) buy & hold investment.

Purchase price: $485,000
Cash invested: $1,000

Zero on Closing plus non closing related expenses 

House Hacking

Triplex in Baltimore, MD. Two story row home turned into multi-unit triplex in Hampden. First (2BD/1BA) and next 2 (1BD/1BA) second and third, all units vacant.

My property management company is projecting

Rents for 1BD/1BA $1275 - $1480  and 2BD/1BA $1400 - $1700

 Previous owner had listed for 475,000 in 120 days ago. I wanted to offer for $430,000 and my realtor told me "No the seller/listing agent said No that is too low" The property fell out of contract twice already and allegedly was asking price.

I had heard good things about rental properties in Hampden from other members on this forum, data city. other databases and decided that it would be a good investment based on those posts as well as my need for turnkey investment property due to me being stations overseas. . Currently my conservative cash flow is $469.00 from occupied units. Cash on Cash return is 193%. Return rate on property 10%. Turnkey property, due to me being overseas for three next four years and no team back stateside. I was thinking DC or other parts of Maryland like Takoma MD but the crime in Baltimore has me worried about zero appreciation and this property high purchase price plus luxury features. I have to buy from the DMV area. 

[Will Fraser]

Hi @Sean Byrd, in general when you have a Cash-on-Cash return of 100% and up it's "nothing but net!"  If you consider the asset you purchased as a business it brings some clarity in how good it is:  the business was purchased for $1,000, will throw off some money along the way, has tax benefits, and then in the end will be worth $485k plus appreciation.  Add to this the fact that you won't have to operate it and you've got what sounds to me like a no-brainer!

Well done, Sean!