Updated over 8 years ago on .
Duplex Due Diligence
All - I've been looking at several deals and curious if I'm being too conservative or it's more the market has heated up. The duplex I'm looking at is listed for $225K with the following monthly numbers:
Rent $1,020 * 2 = $2,040
P&I - $760
Taxes $317
Insurance - $83
Vacancy - $128 (holding back 75% of 1 month's rent)
Repairs - $50
Prop Mgmt - $0 I'd be the landlord.
Capex - $200
Other - Water - $42
I'd put 25% down (assuming $200K purchase price) or $50K, $10K repairs, $2.5K closing. So $62.5K cash investment. I'd calculate 8.9% or 7.3% cap rate, does this seem reasonable? I would classify this as a B neighborhood near a college campus. Thanks for any insight.