First Property Owner/Occupant FHA Triplex SW Missouri

[Zachary H.]

Hello Biggerpockets community, 

I have recently put a triplex under contract that very well may be my first persona property. The property is a 2,400 sf Triplex located in Springfield, MO. The site is in a phenomenal location being within short walking distance to a Public University with over 20,000 students and pretty much in the center of town. each unit is +/- 800 sf 2BR/1Bath and each unit only needs some minor renovations to bring it up to snuff (carpet and paint). I personally believe the rents are below market, however some additional improvements may need to be made in order to realize the potential market rents. The details of the deal will be included below and I will add some comments as I see fit. Roof is newer and in good shape, HVAC appears to be in good shape. The Seller has agreed to make some exterior repairs with an allowance for additional repairs after the home inspection. Property includes street parking, 3 designated parking spots and a car port with 3 slips and lockable storage for each slip. I will live in the property for the first several years according to FHA standards and therefore cash flows may not appear as great during the early years.

Purchase: $165,000

Rent: A-$200 (I will be living in this unit with a roommate paying me $200-$250/mo, for tax purposes I may or may not pay myself rent), B-$450, C-$475 [$1,125/mo or $13,500/yr]

      I believe potential market rent is in the $500-$550 range depending on updates

FHA Loan: 3.5% down, 30 year am, 30 year note, no points (+/- $900/mo PITI)

Tenants pay electric, gas, water & sewer all separately metered

Taxes: $1,400/yr

After doing a few initial calculations this looks to be a fairly solid deal. While not a home run I believe this one is at least a single. Although essentially buying at a 6% cap, my CoC returns in years 3 on are about 56% and it would lower my effective tax rate significantly. So now I'll turn this over to the pros in the bigger pockets community. I value and respect all of your opinions and look forward to learning what you have to say about the prospect. Thanks for all of your time in advance.

Best,