Updated about 5 years ago on . Most recent reply
Property Analysis
Hello, I am new to real estate. Can you please advice if following property (duplex) is worth going after?
| Purchase Price | $110,000.00 |
| Rent/month | $ 1,250.00 |
| Closing Cost | $ 1,870.00 |
| Down Payment | $ 27,500.00 |
| Mortgage/month | $ 412.00 |
| Taxes/month | $ 120.00 |
| Insurance/month | $ 80.00 |
| Vacancy (7%)/month | $ 87.50 |
| Repairs (5%)/month | $ 62.50 |
| CapEx (7%) | $ 87.50 |
| PM (10%)/month | $ 125.00 |
| Lawn Care | $ 55.00 |
| Expense Total | $ 617.50 |
| Expense Total (%) | 49.40% |
| Total Expense | $ 1,029.50 |
| Net Cash Flow/Month | $ 220.50 |
| Cash on Cash Return | 9.01% |
| Cap Rate | 6.90% |
| 1% Rule | 1.14% |
Most Popular Reply
Falak, it all looks good just one question, are there utilities you will be responsible for? or appliances you need to purchase? or renovations? --- It's really up to you and your area.... it really, really, really depends on the are. I personally like to see the COC Return above 12% and Cash flow about $80 higher... but again it really depends on your area. If you could either increase your rent to $1,400 (if you think you have that capability - $75/unit increase) you would be able to get @ 359 cash flow and @ 14.6 cash on cash return. Primarily I would try to get the price down as a first line though if you could get a rate below 4.375% and instead get a rate of 4.0% (if possible) and get the price down to 100K you would be looking at @ 274 cash flow and @ 12.2% cash on cash return ------------- BUT just remember it really is up to your area.... if that is the norm in your area and you comfortable with it, then sure, but again I would like to see your Cash on Cash return be closer to 12%.
I hope this helps.
Alex