advice please: condo vs triplex

[Mel Rosario]

buying in the inland empire, need help which one to buy. here are some details:

Condo 1500+ sq ft, newer community, accessible to freeways an shops
150K (built 2005) cash offer of 150k
HOA 300/mo
prop tax 150/mo
mgmt 145/mo
insur 50/m0
rent about 1450/mo
my calculations about 6.5% net return, vacancy not included to make it simpler, appreciation may be slow, prior sale of this place $286k

triplex older built in 60s, 2/1 x 3
500k at 150k down at 5% interest 1460/mo for mtg
rents $3100/mo
tax 500/mo
mgmt 300/mo
insur 150/mo
water uttilites 100/mo
my calculations about 4.8% net return, assume no vacancies, appreciation slow, nice older matured community.

fully paid vs, paying down rent. just want an opinion or advice. for some reason i lean for the triplex but also can't beat a free and clear property.

i usually buy in la/oc counties but trying out inland empire

thanks in advance

[Casey Cuppy]

Those are both looking tough. The high taxes on both are eating up your cash flow and the HOA on the condo is killer. It better cover almost everything to be $300/mo. The taxes out here in Arizona will barely be over $500 for the whole year!!!

[Dorance Creighton]

@Mel Rosario  Hello I'm very familiar with the Inland Empire market. The cap rates can differ from one city to the next. Which city are the buildings located? Do the tenants pay any utilities?

[Wayne Brooks]

You will have some repairs/maint on the condo.  Much more including capex on the triplex.

[Mel Rosario]

durance,

I just use cap rates as a guide, more concerned with the safe max return of my investment.  the inland empire seems like I will get higher returns in cities such as riverside compared to oc properties, not every area is nice though.  I pose this question just to see what some of the BP members would choose.  I will get instant gratification with a fully paid condo with low maintenance since it's covered by the association and it's fairly new.  while the triplex is older and may have some eventual maintenance issues. 

is money now (fully paid condo) better that a little less money and more in the future when tenants pay the mortgage down?

[Steve Veen]

@Mel Rosario

Here is my humble opinion on debt... right now, with lower rates, "income producing" debt is the best thing you could have... Step back to 50,000 feet and you see that, as a nation, we are poised for above average increases in our rate of inflation.

As the cost/price of everything increases quicker, your fixed rate debt does not increase. This just means that your mortgage will continue to be easier for your tenants to pay off.

Besides that, you get a far greater ROI when your leveraged (smartly).

Steve

[Dorance Creighton]

@Mel Rosario  @Steve Veen 

Steve these were my thoughts exactly money is so affordable its a perfect time to leverage. In my option the triplex will have a better resell value. Smaller multiple unit are in high demand for experienced and new investors. I don't see this changing anytime soon. 

[Mel Rosario]

sorry for late reply, thanks for all your inputs.

unfortunately, that triplex is pending. oh well, there will be more of them