Buying another rental will these numbers work?

Question

I am going to buy another rental in late summer in Colorado.  I want to give my agent some ideas about what I want.  I have $35,000 to use for down pmt.  If I am correct this should be enough to by a dueplex in the $100 to $125K range.  At 4% interest the P.I. payment should be $350 to $430 dollars.  I just bought a dueplex in the same area for $100K.  Taxes and insurance are $1,600 a year.  I use a P.M. and they get 10%.  I am thinking total rent should range from $1000-$1200 a month.
Question is are my perameters in the ball park??

Thanks in advance for all your help.  Bigger Pockets ROCKS!!
RR

Jon Holdman · Answer

So why invest in those areas?  If you're in AK and investing from a distance, why choose CO?  You're right, good deals are hard to find here.  Its become more competitive and you'll likely do worse than last year.  Why not go somewhere else?

Mark Ferguson · Answer

Where in Colorado are you looking?

Ralph R. · Answer

Thanks Kelly.  I have another duplex in the same area, and when I researched it I was not able to find any better numbers.  Its hard to find rents in the rural areas of Colorado that are much over 1%.   If you get into the tourist areas the vacation rents are higher, but the also afford longer terms of vacancy.  Purchase prices are high as well.

Kelly N. · Answer

Hi Ralph,

Welcome to BP!

At first glance, the number look fin to me.  Just be sure you know what the insurance will be and who pays utilities before you make an offer.

If you go by the 50% rule, you have $500-$600 per month for the expenses (everything but PI) and the other half for PI and profit.  Most on this site like to see $100-$200 per door in profit, looks like your situation will bring in about $75- 85 per door ($500-$350=$150 or $600-$430=$170).

That might be all you can get in your market, but of course if you can find something cheaper that rents the same, or the same price that rents for more, you will be in better shape.

Hope that helps,

Kelly