Philly Triplex..Would you do this deal??

[Kip S.]

Hello,

I'd like ask for your advice on whether a deal is worth pursuing.  Here are the details:

FSBO Triplex in a nice neighborhood in Center City Philadelphia.

Selling price is a little over $500k. 

Gross income = 46k/yr.

After PITI, there is about 15.5k/yr leftover

Owner paid utilities = 2.5k/yr

Using these assumptions:

12% of rent for a PM = 5.5k

8% of rent for vacancy = 3.5k

Not including the tax benefits, I'm left with < 4k/yr for profit, repairs, capex, reserves, etc., which is >$100/unit per month.

The charged rents seem reasonable, and may be $25-50/mo below what the market allows.

The building and units seemed well maintained. All seemed very rentable, though not modern. No central AC and only electricity was separated. Zoning allows for a 4th unit by-right, but I did not think there was an obvious place to create one.

If I owner occupy and self manage for 1-2 years, rent from the other 2 units would cover PITI, and I'd only be responsible for utilities/repairs/capex/vacancy, which seems better than wasting $1100/mo on rent.

My main concerns are 1) I'll get almost no cashflow if I move out, and 2) it's a bad idea to put 90% of my savings down on a property that may not cashflow.  

What do you think?? Does this deal seem worth pursuing?