Duplex deal in Garland, TX - Newbie needs help in analyzing
Hi all,
I'm very excited to be a new member here.
I'm into the option period of a duplex in Garland, tx. The 2 units are platted separately so I have to get 2 separate loans and do 2 separate closings. The good thing about this is that I can sell one off if I want to later but for now I have to get 2 of everything.
Here is the deal just for one unit (the details are the same for both):
- Purchase price: $95,000
- No repairs needed (current owner is taking care of the big things found in the inspection)
- Current tenant pays $925/month
- Assuming 5% vacancy and CapEx
- Assuming 8% repairs
- Insurance is $95/month
- Taxes are $153/month
With a conventional loan of 25% down and a rate of 4.38% here is what the calculator gives me:
- NOI: $6,128.48
- Monthly Cash Flow: $154.97
- Total Cash Needed: $28,590
- COC ROI: 6.5%
- Pro Forma Cap: 6.14%
- Purchase Cap: 6.45%
- 50% rule monthly cash flow: $106.76
- Income-Expense Ratio (2% Rule): 0.93%
- Total Initial Equity: $23,750.00
- Gross Rent Multiplier: 8.56
- Debt Coverage Ratio: 1.44%
Is this a good deal?
Also, one of the units was remodeled with new floors and appliances but is currently vacant. Seller had a tenant that wanted to move in for $1049/month but they would be bringing a german shepard. I'm not a fan of those dogs. I've seen what they can do. Not something I want on my first rental property. So I asked them not to do that. But maybe its a good sign on what rents could be?
The other unit that is occupied could use some updating when the tenant leaves but I don't have to. And the current tenant owns the fridge so I will likely need to buy a new one.
Thanks everyone!