First, I must congratulate my friend Brandon Turner on his latest acquisition of a triplex which he recently discussed in his article “How I Found, Analyzed, and Bought an Ugly Purple Rental Property.”
The numbers he provided looked great.
This definitely seems like a rock-solid deal for Brandon (except for the cash out of pocket), but I do see some elements of this acquisition that give me heartburn…
In fact, I wouldn’t have touched it with 10-foot pole and I caution you against it as well…
I want you to know that I asked and received permission from Brandon to write this article. I am writing this in the interest of all of you newbies out there, because while experienced operators like Brandon will more-than-likely do very well with this deal, there are structural elements here that represent a great case study of the less obvious things that can potentially be very problematic…
When we talk about a triplex, what we are really talking about as income investors are 3 units representing 3 revenue streams. It is important to realize, however, that not all 3-unit properties were created equal.
Did you take the time to view the video as part of Brandon’s post? I did, and I also read the entire post. I am not sure if you noticed this, but the video seems to be missing one vital piece of information which is contained in the text – the fact that this building used to be a single-family dwelling and was at some point converted into multi… In the world of triplex buildings, this one is indeed a Waldo; it does not conform!
“Who cares,” you say – “it’s three units and three revenue streams!”
Understand – the original design …read more