2 houses on 1 lot....numbers look good...play devils advocate
Hi everyone...
Im in negotiations on a unique property. A 2 bed 1 bath 2 story house and a 1 bedroom ranch house on 1 lot. Being sold as a package. Both houses have recently been redone and are move in ready. Asking $65K...they are holding firm at $59k. One thing I don't like Is there is a well on the property that feeds both houses....although this could be a good thing as tenants don't have to pay water.
Figure I can get $600 to $650 for the 2 bedroom and $500 to $550 for the 1 bedroom. Tenants pay all utilities
Taxes are $1090 a year
Insurance for both - $600 a year (this is high but I like to be conservative)
purchase price of $59K with 20% down.
$47200 loan -- 3 year ARM amort. over 15 years with a 5.29 rate = payment of roughly $380 / month
I self manage. With these units being updated I don't see any maintenance of the bat...
$1100 in rents = Gross rents of $13,200
minus taxes, insurance and mort. payment = NOI of $6950 yr.
what % should I use for unforeseen repairs / vacancy--5% ?
With that 5% factor Im coming up with about $5,900 year in NOI
Seems like a good one to me....thoughts?