Is this Duplex a good deal?
As this is my first investment purchase and it would be an out of state investment I would have a property manager continue to run, I would REALLY appreciate any feedback or input!!!!
VERY Long Term Tenants (claim is 20+ years) in each unit are family members (brothers)
Unit 1 - One is section 8 – check straight from govt. ($350)
One is on social security and is disabled – other pays rent cashiers check ($275)
Unit mix 2 x 2 bd/ 1 bth
Here are the numbers:
Price $26,000 (they will only accept cash) I can come up with about 10k in cash but would have to take a personal loan to cover the rest
Gross Rent:
$7,500 (100% occupancy consistently)
Expenses –
A) $1975 (owners claims with property mgt included)
OR –
B) $3000 (if I assume a 40% of rents =expenses)
NOI:
$5,525 (if use A expenses)
OR
$4.500 (if use B expenses)
Even if I was to 100% LTV at a $26K price at approx 7.5%
Annual Debt Service would be: $2340
So Annual positive Cash Flow would be:
$3185 (if expenses A – owner claims) (or $265 a month)
OR
$2160 (if expenses B – using 40% of gross rents) (or $180 a month)
Repairs known (before property inspection) needs new exterior and interior paint (additional $1,500), Roof is approximately 10 years old
The money seems small but consistent
Duplex Located in Buffalo, New York
There have been a lot of foreclosures in that area – some I can tell were investors
On the plus side, these tenants don’t seem like they are going any where soon.
When I ran the cash on cash return and looked at the cash flow it looks pretty good, even if you were to finance it at 100%
So what do you think?
Thanks!
Holly