Quick Deal Breakdown Would You Buy This Triad Duplex?

Question

Ran into an interesting duplex deal today and figured I’d share the numbers for anyone analyzing the Triad market.

Purchase price: $210,000

Rents: $1,100 + $1,150

Total monthly rent: $2,250

Est. taxes/insurance: $260/mo

PM: $180

Repairs reserve: $150

Cash flow: ~ $300–$350/mo depending on financing

Cap rate: Around 7.5%

If anyone wants me to run numbers on a property you’re looking at, I don’t mind helping. I run deal analysis daily for investors here.

Curious what others think — buy or pass?

Tim W. · Answer

If it s a good appreciation market, that CF looks fine to me. If it's a low appreciation market, I'd say pass. In a C class, high CF market, I'm looking for 1.1 to 1.3% rent to price ratio in my Midwest markets. I won't get 5%+ appreciatiom, but I'm more aiming for the CF.

also make sure you have in reserves for Capex and Vacancy. Repairs alone are not enough in my opinion

Pat Lulewicz · Answer

Where in the Triad? What is the age and bed/bath of the home?

How old and what kind are the mechanical systems? What I mean is $2,000/yr in repairs for a duplex can be reasonable but what happens if they're on seperate HVACs and both go out in the same year. If you need to replace 2 ACs for $10,000 and they usually last 10 years (they dont make em like they used to), you've got to amortize another $1,000/yr for those in a capex budget....and that's just ACs...think furnaces that can last 15, roof that's got 25-30, 2 water heaters. You get the idea.

Denise Supplee · Answer

When I underwrite something like this, I start by asking whether the income is durable. Those rents look realistic for the area and the spread between total rent and expenses gives you enough cushion to handle a vacancy or a repair without instantly sinking the deal. I also look at how “clean” the expenses are: taxes, insurance, PM, and reserves look properly accounted for here, which is important because a deal only works if nothing is hiding off-paper.

A 7.5% cap with positive cash flow is respectable in this market, especially on a small multifamily. The next things I’d dig into are tenant quality, age of major systems, and whether there’s any upside (light value-add, rent bumps, etc.) If those check out, this is the type of property I’d absolutely consider, I’ve bought deals with very similar numbers.

Shakur Granger · Answer

Cash-on-cash is definitely the piece I’m digging into next because that’ll make or break whether this one’s worth moving forward on. The cash flow isn’t crazy strong, but in this market a solid CoC above 12% would definitely keep it in the conversation.

I’m always analyzing deals around the Triad, so it’s helpful hearing how other investors look at these numbers. Thanks again for the perspective.

Patrick O'Neal · Answer

I feel like the cash flow isnt strong enough. If the cash on cash ROI is above 12% tho might be worth it! I think it will depend on how much you are gonna have to put down.