How to Analyze my first duplex numbers?

13 Replies

I’m new to Real estate and have an opportunity to buy a duplex for 440,000 in the local dallas area but before I make any decisions I wanted to know the best way to break a deal down so I can create cash flow.

All the numbers are important.  Some, however, are certainly more important than others.  If you post what info you have, I bet you will get a few different ways to analyze it and then you take what you want and adapt it to your needs.

Originally posted by @Jock Tilghman :

@Cameron Tope that’s where I’m stuck, I like to learn the process of knowing which numbers I should be focused on.

Would love to share the figures as well.

 Then let's go through it!

  • Purchase price
  • Rehab/Repairs
  • Rent
  • Mortgage
  • Taxes
  • Insurance
  • Property Management & Leasing (16%)
  • CapEX - ~$200/mo

Please provide the above then we can analyze. 

@Jock Tilghman I don't consider myself a very sophisticated investor but here's how I've been doing it: I simply wouldn't purchase a property if I wasn't very confident that it would rent for at least a $3-500 more than the monthly payment on a 30 year fixed mortgage. I'm sure those numbers wouldn't work for a lot of people but that's how I was able to get my foot in the door 15 years ago and wasn't using a property management company, and still am not. Otherwise the numbers definitely wouldn't have worked for me. For me, a person who doesn't have a terribly strong grasp on finance, that's the simplest way that I can understand the difference between a good deal and a mediocre deal.

@Jock Tilghman I'd say those numbers work alright. Especially if you don't have to do any rehab but I wouldn't take them at their word that it's a turn-key rental property. Definitely do your due diligence and check the place out with a home inspector if that's allowed.

I'll admit that I've never heard of a turn-key rental before and am not sure exactly what that phrase really means or who gives a property that title.

Originally posted by @Jock Tilghman :

@Cameron Tope

I would be living on one side of the duplex as well.

Loan Type- Va

Listing price -475,000.00

Asking price- 429,000.00

Rehab-0 (turnkey)

Monthly cost

(Taxes,insurance, mortgage)- 3,101.47

Rent-1,700

 So what's your net cashflow after all the above?