First Multi-Unit Deal, I think I know my answer...

[Carolina E.]

Hi BP.  I need some input on this deal and anything I might be overlooking.  Looking at a 3 unit.  2/1, 1/1.5 and a studio.  I do not like the bedroom numbers, but still am interested.  All units have separate utilities and are currently vacant.   I am being very conservative with my numbers.  

2bed rent = $750

1bed rent = $690

Studio rent = $500-550

Estimated repair cost = $25k

Taxes around $585/mo (which I will be appealing)

Insurance = $150/mo

Lawn/Snow Removal = $100/mo

Loan payment = $200/mo for about 35K

They are asking 60K.  

ARV I am estimating to be around 120K

This is my first multi unit, so I want to make sure I am thinking straight.  

[Jay Dewberry]

Hi Carolina. Perhaps my contacts are a little dirty, but is that $585 per month in taxes??? That seems awfully high for a triplex with two or less beds per unit. I would think the taxes alone is enough to chew up any potential profits. Perhaps run these numbers through the BP Calculator with those taxes and with a projected/comp reduced tax rate. Also, how long would an appeal take, because we all know how slow government paperwork can take. Just my thoughts.