Which Deal? Cant Decide!

[Jeff G.]

Okay I was originally looking for duplexes only but my realtor gave me two great properties one is a duplex one is a single family.  I cant make a decision which way to go for my first deal.  Both are in excellent shape, no deferred maintenance, fully rented through May and the renters all want to stay.  Here is how they stack up:

Duplex 2/2:

Asking 39,900 should be able to get for 35K

Total monthly rent: 995

Taxes 1435

With all my calculations, 5% vacancy, 10% maintenance and everything else using the BP rental analyzer I get a yearly positive cash flow of $6321.01

Single Family (4 bedrooms)

Asking 44,900 should be able to get for 40K

Total monthly rent 957

Taxes 1716

Same thing with all my calculations I show $5433.64 annual cash flow.

So here is the dilemma, with the duplex though both renters want to stay it will likely have higher turn over in the long run and it doesn't have off-street parking which will make it a little bit harder to rent.  The single family has 4 bedrooms and is very desirable. This will be my first of two properties this year and I plan on buying 3-4 more next year.  So I will have a mix of single and duplexes no matter what in the long run. Got the first deal jitters I guess and could use some insight from you seasoned guys and gals out there

Thanks

Jeff

[Andrew Syrios]

You will have to turnover the duplex more often, but the cost of the turnover on the house will be higher. In addition, it will be rare when you are getting no cash flow out of the duplex, whereas the house will net zero when it's vacant. 

The numbers all point toward the duplex. That being said, the other being factor is what are the properties worth and how much equity will you have in them. If you'll have a lot more in the house, I might lean that way. Otherwise, unless the duplex is in a really bad area, I would go with the duplex.