Buy and Hold Returns and Expectations - Near Pittsburgh, PA

[Jack Macioce]

I am currently analyzing a deal in Butler, PA.  It is a triplex within the City of Butler.  The units rent for $625/425/425 (two bedroom/studio/studio).  I wanted to get an idea about returns other investors are experiencing in and around this market, and possibly OPEXs as percentages of Gross Schedule Rent?  I'd like to know to make sure my analysis is accurate because of the following:

Two items of major concern:  (1) natural spring runs adjacent to the property, so water does infiltrate one corner (8x8) of the basement/crawlspace.  Seller's have installed a sump pump; however, I'm not sure that the space is every completely dry.  (2)  Wall outlets were flagged as ungrounded, which suggests that there is no ground wire, ground is not properly connected, and/or reverse polarity.  Fear is rewiring as that could be expensive.  Should outlets be grounded?  What are risks?

Seller's are not budging a whole lot on sales price (started at $90k, down to $86k).  Major systems, windows and roof, were all recently replaced within the last 5-8 years.  

[Jack Macioce]

@Rob Beardsley

We obtained a conventional (30-year) mortgage from a local credit union at 4.25% with 25% down.

Since acquiring this property, we were able to turnover all tenants and have increased rents to $700/450/450.