Is this a good deal or is the HOA situation going to kill it?

[Alex T.]

I'm currently looking at a property in Houston (Humble area) as an out-of-state investor. It's a fully-occupied triplex with rents totaling $2495/mo. Here is the data I have on it, hoping that you guys can tell me if this is a good deal:

asking price: $179,000

rent: $2495/mo (800+800+895)

taxes: $2548/yr

HOA: $7749/yr (all external maintenance + external insurance, $215.25 per unit per month)

internal insurance: $630/yr (figure from seller, this number is much lower than it would normally be due to HOA insurance)

Since all external repairs are done by HOA, I factored in 5% repairs and 5% vacancy (both of which seem conservative given the area), which gave me a ROI of 14.71% with 25% downpayment.

Here is where things get interesting, and tell me if this is fine or if I should run from this deal. The seller's agent was extremely friendly, went out of her way to tell me all the details and explain why the seller is selling (moving long-distance apparently). After I mentioned that the PM companies I talked to would not give me a discount just because most external repairs are handled by HOA, she volunteered to be the boots on the ground if needed, saying that she has worked with the seller since 2007 and knows this property really well. When asked how much it would cost, she stated that she'd only expect to be reimbursed for the mileage of driving there when needed (obviously the repairs would come out of my pockets) and 0.5 of monthly rent if I decide to list through her. One thing that concerns me is why the current owner doesn't just do the same if he's moving out of state.