Need help I feel like it's to good to be true?

9 Replies

I am analyzing this property, after talking with the owner and the agent I feel this property fits my company's portfolio perfect but I'm using DealCheck App and never questioned the apps reports until now . I can use some help :)

$489,000 Previous Price: $485,000

Active●

# Units:2GSI:$48,000SqFt:2191Year Built:1987Ac/LSqFt:5,663/0.13

Facts & Features

List Date06-07-19

Original Price$485,000

# Buildings1

LevelsTwo

Parking Spaces5

CoolingCentral Air

HeatingCentral

LaundryInside

Gross Sched. Inc.$48,000

Net Oper. Inc.$0

Electric Meters2

Gas Meters1

Water Meters2

Interior

RoomsJack & Jill, Main Floor Bedroom, Main Floor Master Bedroom, Master Bathroom, Master Bedroom, Master Suite

Appliances6 Burner Stove, Dishwasher, Gas Oven, Refrigerator, Water Heater

Interior FeaturesCeiling Fan(s), Recessed Lighting, Stone Counters

FlooringLaminate

Exterior

Lot FeaturesOn Golf Course

Security Features24 Hour Security, Gated Community, Gated with Guard

FencingPartial

SewerPublic Sewer

Annual Expenses

Total$0

Electric$0.00

Fuel$0

Trash$0

Insurance$0

Water/Sewer$0

Unit Details

Unit

Units:1Beds:3Baths:2Garage:3Actual Rent:$0Total Rent:$0Pro Forma:$3,000Furnished:Unfurnished

Unit

Units:1Beds:1Baths:1Garage:0Actual Rent:$0Total Rent:$0Pro Forma:$1,000Furnished:Unfurnished

# Of Units With:

Electric Meters2

Gas Meters1

Water Meters2

Dishwasher1

Range2

Refrigerator2

Wall AC1

Additional Information

Special Listing ConditionsStandard

Association Fee$495

Association Fee FrequencyMonthly

Land LeaseNo

Rent Control YNNo

50% OCCUPIED AT $1200 FOr STUDIO And THINKING $2995-3100

I never trust the pro forma numbers.  Can you really get $4k per month in rent for these 2 units?  Seems the unit that generate most rent is vacant (probably for a reason).  You need to know the area and have good feel of the local rent.

Given this is duplex, you should be able to run comps to see market value. We can not say if this is good deal or not without knowing all the expenses, such as insurance, property tax, etc. $495 HOA will eat into any profit, but it also depends what HOA would cover.

@Jordan Autrey

The accuracy of DealCheck's cash flow projections will depend on you correctly estimating the potential rent and operating expenses of the properties you’re analyzing.

Looking at what you posted, it doesn't look like you have an itemized list of expenses, as well as vacancy estimates, which will make it very hard to calculate any sort of pro forma, like the others have mentioned.

@Jordan Autrey

You need to contact the listing agent and ask for a detailed info packet, including the current rent roll, operating statements for 2 years, cap ex schedule or past work done, pictures - if they have any, etc.

Well all of the expenses listed are $0, so I would say it is too good to be true!

You need to get your hands on the historical expenses in order to determine who much the property will cost to operate.