Updated about 9 years ago on . Most recent reply
Brick Duplex Analysis
Hi BPers,
So this is one of the many possible REI I'm pouring over before finding my 1st deal and taking the plunge. I'm having a little trouble coming up with an offer Price. I'd like to get some feedback on my numbers and if you think this is a good deal cashflow or equity or both and why. Also is it my calculations or is there a big discrepancy between the 50% rule numbers and the 4-square? I haven't asked for any detailed info yet, just want to see if it could be a decent deal. Thanks
Brick Duplex Chicago Area (B,C neighborhood) 2 blocks away from a sketchy possible war-zone on Austin Ave
Est property value $254,280 (from property tax website)
Taxes from 2015 $8223.94 (OUCH!)
Asking Price $419,000
Unit 1 3bd rent $2,200
Unit 2 2 bd rent $1,500
Total Cash Flow $3,700
50% Rule
Its recently remodeled in good condition outside, decent curb appeal, nothing fancy, new appliances stainless steel, both units leased and occupied. I haven’t asked fo detailed info yet cause I’m still getting the hang of analyzing deals. So by 50% rule with this asking price.
$3,700 = $1,850 left after estimated NOI
30 fixed mortgage at 4.09% and 20% down:
$419,000 - $83,800 = $335,200
Monthly Payments of $1855
$1,850 - $ 1,855 = -$5 Net Cashflow
Using Brandon’s 4-Square Method
| Income | Cash Flow | ||
| Rental Income | $3,700.00 | Income - Expenses | |
| Laundry | $0.00 | Total Cash Flow | $595.00 |
| Parking | $0.00 | ||
| Pets | $0.00 | ||
| Storage | $0.00 | ||
| Total Income | $3,700.00 | ||
| Expenses | CoC ROI | ||
| HOA | $0.00 | Down Payment | $83,800.00 |
| Lawn/Snow | $140.00 | Closing Costs | $3,000.00 |
| Vacancy 5% | $185.00 | Est. Rehab Budget | $1,000.00 |
| Repairs 5% | $185.00 | Misc/Other | $0.00 |
| Cap Ex 10% | $370.00 | Total Investment | $87,800.00 |
| Prop Mng 10% | $370.00 | Annual Cashflow | $7,140.00 |
| Mortgage | $1,855.00 | Cash on Cash ROI | 8.13% |
| Total Expenses | $3,105.00 | ||