How is this for first deal?
Hello everyone,
I'm thinking of purchasing my first property ever (other than my primary residence), but not sure if it's a good deal. This is a 1984 duplex, 5/4, located in a class B neighborhood within walking distance to shopping plazas. I was hoping to obtain some inputs on this deal to make sure I'm not missing anything. There is a similar unit that is currently pending. The asking price for that was $255,000. Thank you in advance.
Purchase/Finance
Asking price: $259,000
Down 20% = $51,800
Interest 4.5%
30-year loan term
Closing cost of 3% = $7,770
Total cash needed = $59,570
Operation
Gross rent / month = $1,900
Operating income = $1,620
Operating expenses = $625 (36.8% of income: 10% vacancy, 10% maintenance, 10% cap ex, property management %10, insurance $50, property taxes $243, gardening $50)
NOI = $1,024
Loan payment = $1,050
Cash Flow = $35/month
Cap Rate = 5%
ROI (year 1) = -7.1%
ROI (year 2) = 12.9%
ROI (year 5) = 79.8%
-HN