Advice on a Triplex Deal

[Dan Kelley]

My realtor walked me through a triplex yesterday prior to it being listed on the MLS. I liked the unit as it was in better shape than several buildings I've been through. It's downtown, yet still in a decent area right next to a library.

I'll attach a spreadsheet. Hopefully you're able to read it. If not I'll try to figure out a way to post it better.

1. I'm somewhat guessing currently on the utilities. Owner pays all and said it was around $4,000/yr, I bumped it up to $4,850.

2. I ran the calculations assuming a management company. Realistically I plan on managing it myself to start out.

3. The seller is planning on listing at $97,000. My purchase price I entered should yield a 10 cap with management included. If I consider it without management, it's a 13.5 Cap at my suggested offer of 73,230.

4. Property has already been lead abated and seems to be in great shape. Each unit is not nice enough that I'd like to live in them, but they are simply a little rough cosmetically and not kept the neatest from current tenants.

5. ALL 3 tenants are on housing. Rents were just recently raised on some of them and it was approved by housing and the building recently passed housing inspection.

6. So far, all of these numbers and details are word-of-mouth from seller, so I've still some work to to verify everything.

7. I would like to look at possibly separating the utilities in the future. Currently there is only 1 unit that the PO had the electric separated. Everything else is tied together.

8. The $1,200 misc. income is coin operated laundry. Washer is 2yrs old, dryer is 7-10yrs. PO claims approx. $100/month income from that, but I don't know if that is a realistic number in a 3-unit building?

Please look it over and let me know your thoughts, concerns, or advice. Do you think the numbers are OK where they are? Or should I push for a lower purchase price to secure a greater cap rate when factoring management?

**EDIT: If you ctrl zoom in your browser, you can read the spreadsheet just fine. Sorry about that!***