Sold $995,000 - Triplex
As I have said many times before, one of the best ways to bring you a great deal is when the marketing of a property features (a) incorrect information (b) incomplete information or (c) both. Well, here we have a case of “both!” And hopefully, one of you will benefit from it. Here are the specifics:
This is a 3872 sq ft triplex that is 100 years old and has all the turn-of-century charm and character one could hope for. On the MLS, it says (for whatever god-forsaken reason) that it is 992 sq ft! I have seen the inside and it is most definitely 3872 sq ft, plus that is what the title says, as well. Additionally, on the MLS, there is no mention of all the old-world charm and character which give it a huge premium with tenants.
Now, it is true you have three tenants in there paying considerably lower than market rent ($1648, $1745 and $1802.) However, I met one of the tenants and my impression is it will not be difficult to negotiate them out. In any case, one can find all that out while in escrow. Once the tenants are out, the rents should add up to a total of about $9,000/mo. I don’t see that one would have to spend much money on the units beyond what it costs to negotiate the tenants out, which is approximately $30K. With all of this, here is what the numbers would look like:
Out-of-pocket expenses, including down payment, closing costs, upgrades and tenant relocation = $325,000. Monthly expenses (mortgage, etc.) = approximately $5000/mo. Income, assuming one is successful at getting current market rents = $9,000. Monthly cash flow = $4000/mo, or $48,000 annually. This means a cash-on-cash return of about 15% on a beautiful upside property.
If you are interested or want to know more, feel free to contact me anytime.
