Help with analyzing multifamily in LA County

[Kevin Linh]

Hello BP, I found a Duplex in Temple City (25 mins from LA), CA I'm curious if I analyzed the deal correctly. I'm going to try and see if the owner will do seller finance.

Front house, 3Br/1 & 1/2 Ba

Back house, 1BR/1BA

1,843 sq ft.

5,663 sq ft. lot

Sale $650,000

8% interest = $52,000

Total = $702,000/30= 23400/12= $1950 a month

$1950+650(tax)+180(insurance)+200(repair funds)+150(5% vacancy)= $3130

Rental comps for 3Br/2Ba $2200-$2500

1Br/1Ba $1200-$1600

With conservative rent income $2200+1200=$3400

Cash flow $3400-3130=$270 a month

Let me know what you guys think and tell me if I did anything wrong or if I need to increase or decrease any of my numbers.

Thanks again guys for the help.

Kevin

[Jeff Greenberg]

@Kevin Linh I am at a real loss trying to figure out where you came up with your mortgage payment calculations. The easiest way to figure out your monthly payments is to find a mortgage calculator online. With a 25% down and a 3.5% loan, I come up close to $2200 per month. Your California taxes are going to be more in the 1.25% area making that around 677 per month.  On your low rent numbers 5% vacancy comes out at $170.  Your $200 per month repair reserve may be a little low. Are you planing on managing this yourself as I see no PM expense. On my numbers your cash flow has disappeared.