Duplex - Houston, TX

1 Reply

Hi,

I'm looking for some advice on a duplex. If I buy this or similar it would be my first rental. Using the 50% rule, and I built a spreadsheet that has payment calculator that estimates mortgage payments, insurance, taxes, maintenance (capex and little fix it items), and lost revenue between tenants, it seems like it would cash flow.

Here is what worries me. There are around 10 duplexes for sale by the same owner in a couple block radius all for around the same price. I feel like I must be missing something big for someone to be selling all these apparently cash flowing properties. Thoughts/suggestions?

Here is a link to one of the duplexes.

http://www.realtor.com/realestateandhomes-detail/1...

Details:

Price: $100k

Rented for $1400/month total (I haven't looked into if the owner pays utilities or not yet)

If I bought it I'd put 20% down

Mortgage payment: $480

Insurance/Taxes: $250

Assuming $300/month in capex savings/maintenance

Assuming 11 months rented per year (to try to estimate some vacancy into the equation)

All this adds up to:

Rent:+$15,400

Mortgage Payment, tax, insurance: -$8,756 ($3k is taxes/insurance)

Maintenance: -$3600

Total: +$3044/year ($253/month)

or using the 50% rule

$700/month to expenses

$700-$480(mortgage payment) = $220/month

Any advice is greatly appreciated. I don't want to throw my money away and would rather take a beating on here for something I did wrong before I spend the money as opposed to afterwards, so if this is a bad deal please let me know.

Thanks,

Zach

I saw these as well. Most likely an investor wanting to get out of the business or do a 1031 exchange.  Rents appear to be below market, so may be some room to raise rents over next year depending on property condition. But condition looks questionable on most from picture.  Could be interesting to see if a package deal with commercial financing and some cash partners could allow you to buy all. I think there are 13 duplex and 2 or 3 triplex in two different neighborhoods close to each other. 

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