Any thoughts on this deal in Norristown, PA?

[Charles McCabe]

https://www.biggerpockets.com/calculators/shared/458451/4b2298b5-8512-41b1-a3e1-cce65a7d76b4

Multi-family rental (triplex) in Norristown, PA (Montgomery County).

This is coming right off the MLS, no discounting done. All units are already occupied at those rents. Anything is fair game...criticisms of the area, check...of the cost assumptions, check...criticism of taking it right off the MLS, check.

Thanks,

Chaz

[Gregory H.]

@Charles McCabe If it is the property I think it is based off the specs, one glaring concern in the assumptions I see is the appreciation factor. This property sold 12 years ago for $154K, so if you are buying it for $120K, there is no way I'm going to factor in a long term appreciation of 3% per year unless you know something that is going to cause Norristown to have a major population boom. I would factor in zero appreciation.

Vacancy, I usually factor in 3-5% for Class A areas. Unless you have hard data to back up a 5% vacancy assumption, I'd be conservative and estimate 10%. Water/Sewer at $50/month seems low for 3 units. Not sure what the misc. expense of $500/year is ... trash, CAM costs, or exterior maintenance? CapEx & Repairs really depends on the state of the building, you might have to budget more than that depending on the status of the capital items, mechanicals, level of wear & tear by tenants.