Deal Snapshot (I'd like your take)

[Daniel M.]

Investment Info (2-unit buy & hold)

• Purchase price: $155,000 (80% LTV - $124,000 loan)

• Amortization / rate: 30-yr @ 8.420%, 5-yr prepay

• P&I: $946.43/mo | PITIA est.: $1,266.43/mo (adds ~$320 T+I)

• Cash to close (incl. points/escrows): ~$39.5k

Why I’m looking at it

• Duplex in a rent-rising area; path to market rents looks plausible.

• Bring both units to market

• Exit flexibility: holds as C-class cash flow, or refi if rates ease.

Rents (current vs. market)

• In-place: Unit 1 $1,100, Unit 2 $1,050 - $2,150/mo total

• Market used in pro forma: $1,200/unit - $2,400/mo total

• Rentometer trend (2BR/1BA, 1-mile): Avg ~$1,017 - $1,180 over 48-6 mo; median $1,000 - $1,395 (small recent sample).

• My near-term view: Avg $1,200–$1,250, median $1,400–$1,450 (if demand holds).

How it pencils (high level)

• At current rents ($2,150):

  • NOI: ≈ $15,006/yr | DSCR: ~1.32 | Cap: ~9.7%

  • Cash flow: ≈ $89/mo - very thin cushion.

• At market ($2,400):

  • CF and DSCR improve

• Lender view:

  • Uses $2,050 rent and $320 T+I - DSCR 1.62 on their calc.

  • Payment line: P&I $946.43; PITIA ~$1,266.43.

• Fees: 2.5% origination + UW/doc + title + escrows push cash-to-close to ~$39.5k

What could go wrong (quick flags)

• Execution risk: Thin cash flow at in-place rents; delays to $1,200/unit hurt.

• Sample size: Recent rent comps are sparse - higher volatility.

• Leverage & prepay: 5-yr prepay + 8.42% rate = limited exit flexibility near-term.

• Ops assumptions: Vacancy ~7%, PM ~9–10% - small misses swing DSCR.

[Zachary Deal]

Rate seems high based on the numbers even for a DSCR loan. The DSCR does look solid even at the high rate