As the title says, I'm hoping to get some feedback on possible factors I may be overlooking. The property is 45 minutes from where I live in a town that is growing and am very familiar with so I plan on doing most of the management work. I found a triplex with 2 long term tenants (5+ years) who I've met and kept their units in great condition, though they are in the units that are not renovated and in turn not paying as high of rent. Any feedback would be great:
Purchase Price: $219,000, 90 days on the market
Surface area: 1900 sq ft
1 unit renovated in the past year which includes new flooring: $800, other 2 units: $690 each
Each unit pays water/sewage, $50 internet fee
Condition: roof is ~15 years old, will need replaced
I was provided with an expense report for the 3rd quarter of 2023. The report covered the overall costs of three different triplexes all neighboring each other and built at the same time and dimensions. The other two triplexs, which had 2 unit and the 3 units renovated, sold in the past month (listed at $225,000 and $231,000). I plan on requesting the following quarter report if I offer.
Average Monthly Expenses per triplex (maintenance/insurance/repairs/utilities/property taxes/vacancy):
$730.50
Estimated mortgage: $1,132
I plan of offering $200,000 - $205,000 due to two of the rooms not being renovated, roof needing work, and after being posted for going on 3+ months. After calculating everything, I found that in the first year cash flow would be cash flow positive by ~$250-$300 based on the expenses provided.
- 20% down, 7.5% rate
I question if there are things I'm overlooking with this being potentially my first investment property. On the surface, it seems like it meets a lot of broad criteria for being a positive investment, including a positive cash flow at a currently high interest rate, but I don't want to miss on my first step into this.
