[Calc Review] Help me analyze this deal: Negative Cashflow!!
So I ran the numbers on a recent sale as it's the type of duplex I want to buy and house hack, to see if its feasible for me to actually do. There are several properties with near identical floor plans in the neighborhood and the sales prices are all pretty similar, so the numbers should be pretty transferable if another comes available.
*This link comes directly from our calculators, based on information input by the member who posted.
The sold price is known.
Insurance was estimated from the Redfin calculator.
Closing costs estimated.
Assumed 20% down as that is what I'd want to do on a deal like this.
Assumed 30 year loan at 3%.
Property tax is thought to be 1% which will be reset by the new sales price at $12,000 annually (is this how it works?)
Assumed 10% aside for repairs, 5% for vacancy, 10% capital expenditure. Vacancy can be reduced if I'm living in one of the units.
No cost for property management as I would be living there and try and do it all myself.
Utility bills are based on what we spend now, renting a similar duplex apartment, although trash and water/sewer I doubled as I assumed landlord (me) would cover both units.
And the results indicate a negative monthly cash flow of $1807!!
This left me scratching my head - who are these deals attractive to? An all cash investor? Some sort of tax reduction strategy? Anyone have any ideas?
As a bit more background, this sold within about 7 days for just over asking price. Whenever these floor plans come up for sale, it's the same story - sell quickly at or above asking price, so this isn't an exception, this is the rule.
How can I compete?
Thanks!