[Calc Review] Help me analyze this deal

6 Replies | Columbus, Ohio

Hello fellow BP members, I have been presented with a possible deal and wonder what you more seasoned pros think. This property is located in Southern Orchard near Children's Hospital. As you can all see I will cash flow from the beginning just not completely to my liking. A little more info on the property; multi-family 3bd, 1bh 1100sqft. each side with an avg. rent of $762 in the area. Thank you

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*This link comes directly from our calculators, based on information input by the member who posted.

Is the property in good condition? The interest rate seemed low at 4.5% is that accurate? 

I would want better numbers from a duplex, seems like a lot of work for not that much return. Maybe you can get for a lower price? Is your bank offering 4.5% 

Thank you,

@Raul Velazquez Jr, is this an FHA loan and will you be living in one side? It doesn't sounds like that's your plan, but it looks like you're planning on 5% down at 4.5% and $0 for initial repair and improvement, which sounds a lot like and FHA or 203K loan to me. Additionally, if you're coming with that much down, you'll definitely have PMI, which I don't see included in the expenses. Don't quote me, but I'm almost certain your PMI would be more than $80/mo which completely kills your cash flow, unfortunately.

I do like how conservative your numbers are for maintenance/PM/vacancy/etc, but IMO you could probably knock those back from 10% to 8 or even 5% and still be in good shape. 

If I was running another option on this deal, I'd adjust the interest rate to 5.5-6%, put 20% down, include $5-6,000 in initial repair (even if that's just cleaning and painting), reduce the monthly expenses to 8%, include PMI at $100/mo and then see where that lands you. Of course, these are suggestions and opinions only - I am, in no way, form or fashion a real estate professional - just a fellow investor in Columbus. Good luck!

I will be residing in one of the units to take advantage of the low downpayment. My financing will either be FHA or conventional with approximately 5% down. Also just found out that the rent isnt as much as anticipated so the cash flow is in the negative.