Analyze CashFlow on a Duplex

[Bishwash Aryal]

Please help me analyze this deal... ~6% CoC Return is this a good deal?

[Kate Johnston]

Hi Bishwash - At a quick look, for putting $50,000 in you can expect about a 15% cash on cash return (insurance + tax + P&I + maintenance / investment amount), not counting the value growth as it the property pays off it's own mortgage. That's okay in my opinion. Personally I shoot for 20%+, but if this deal is otherwise aligned to your investing goals it could be a good move. The two things I don't like about it are 1) how high the property taxes are, because that's going to be a significant expense as long as you own the property and probably only go up. And 2) if you buy the property for $140k and put in $15k of work you're in for $155k, but the property is only valued at $150k. It's not the end of the world, but the numbers are going the wrong way. I'd try to negotiate the seller down to $135k. 

As I mentioned, I looked this over only briefly. For deciding whether or not to invest, I always advise first being clear on what goals you're trying to achieve, then run best and worst case scenarios on this deal, and double check all your facts :)