My first TriPlex - analyzing the numbers

[Luis Silva]

Hi All! 

I am finally in the process of buying my first triplex in the Kansas City area. Very excited and also very nervous! I am really hope for some advice (the good, the bad, and the ugly), regarding the property and what I am getting myself into.

The deal looks as follows:

Purchase Price: 160k

Down payment: $40k

Loan: 120K @ 4.99% - $650 principal and Interest (30yr fixed)

Expenses (I am estimating these):

Utilities: $200 per month

Property Taxes: $170 per month

Insurance: $130 per month

Misc: $60

Maintenance: $150 (not sure if this is light)

Vacancy: $60 ($720 annual)

Management: I plan to manage the property for now. 

Total expenses per month: $1,420

Current Income:

Unit 1: Studio - Rented for $440 - One year lease (Ends May 2018 - just resigned)

Unit 2: Studio - Rented $480 - two year lease (ends May 2019 - Just resigned)

Unit 3: 2 bed 1 bath - Rented $625 - Month to month lease. 

Total Income as-is: $1545

Cash flow: $125 ($42 per unit). 

As-is, the deal does not look to strong but the 2 bed unit is currently under market and where I see the biggest opportunity at this point since the other units are leased for the next 1-2 years. I was hoping to bump that unit up to 700-725 which would make the numbers look a little better. 

Is there anything I am not accounting for? Does this deal make sense? Is it normal to have a 2 year lease (the studio just resigned for 2 years)? 

Any feedback is certainly appreciated. Thanks a bunch!