So here is my attempt at crunching the numbers on my own I feel like I have finally grasped it. looking at this property at first glance:
Duplex 2 units 2bed 1 bath each sale price 87,000
each unit low end rent 600 each
annual income $14,400
vacancy 10% $1440.00
property tax $1740
management 10% $1440.00
maintence 5% $720.00
reserve savings 5% $720.00
mortgage $400 a month or $4800 annually
Total operating expenses $12,060
cashflow would be $2340 or $194 a month
cash on cash return would be 76% roughly
cap rate 8%
Downpayment about $3000
This is also assuming a 4% down payment i know my numbers would exactly look like this because I'll be living in one side although I guess it could because I will act like a tenant myself and pay my rent.
Am i figuring correctly?? Does this look like a good deal to you guys I feel like it is. Right now I'm just going thru every single listing and crunching the number so I get the hang of it. Is there anything I'm missing or that I should add or am I over estimating any feedback would be greatly appreciated.
It looks like you are doing a pretty good job. However, try to get actual numbers to verify your assumptions. Also, technically your mortgage payment is typically not referred to as an "operational expense" (you would not include the mortgage payment in a calculation of net-operating-income, NOI), but you are correct to consider it for cash-flow.
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