Good deal or No?

[Machele Freeman]

Hello all!!

I have a prospective investment property, my first actually, and I just wanted opinion's on whether it is a good deal or not. So this is a triplex, with 3 bed, 2 bath in each unit. The listing price is for 320000, and two units go for 850, and the last for 775, so the gross annual income is 29700. I'll be putting down 20%. Unfortunately I couldn't locate the property tax amount. The property looks to be in good condition. I think that's it. What do ya'll think?

[Logan Allec]

1.25% of purchase price is a good rule of thumb for property taxes in California.

[Jordas Reyes]

So here's my quick math (about to pass out hope I got it right)

Rent income per month $2475

20% down puts you out of pocket $65k (rounded up)

Based on 4% rate over 30 years your looking at mortgage around $1,217 for P&I add tax and home insurance let's say roughly another $400 a month ( I have no idea what this real number is in your area)

Vacancy I would want 8.3% or $205 a month.

Capex at 10% $247 a month.

PM 10% $247 a month. Not sure what this cost is in your area or if self managing but I'd still include this fee.

So total expense at $2,316 leaving you $159 in cash flow.

Cash on cash return is low but depends on what your looking for long term. Is the rent below market?? If you could get closer to 1% rule would be nice.

Best of luck and hope you get some seasoned folks to respond but that was my take on it.

[Brent Coombs]

Low CoC, with the added burden of a $250k mortgage? Let's see...

Nope!