Duplex Offer
Good Evening,
I came across this duplex(Built 1900) by meeting another investor who owns about 30 properties in this very solid rental area in the albany, NY area. He stated that he was sellling this particular property because it was the first property he bought and he would like to use the equity to start flipping.
He told me that he was looking for 130,000. It is a 2BR/3BR w/ 1 BA each , up and down. The only major that it needs a roof. I will also be self managing the property which I didnt consider in the analysis. He also stated that he passes the water bill on to the tenants. This is something that I need to confirm with a few realtors but I didnt include that here either.
Here are the #'s if I could possible get it at 120,000:
30,000 down
5,000 C.C.
35,000 Out of Pocket
Rent -750/850 Month= 1650/mo
8 % Vacancy = 132/mo
Effect Gross Rent = 1518/mo
10% Mngt Fee = 152/mo
Insur. = 83/mo
Maint./Cap Ex.(13%) = 197/mo
Water/Sewer (Actual)= 88/mo
Lawn/Snow Removal = 50/mo
Prop taxes = 311/mo
Total Oper. Expenses = 881/mo
NOI = 637/mo
Mortagage @ 4.25 = 443/mo
Monthly Cash Flow = $194/mo
Annual Cash Flow = $2329/yr
Cash on Cash 6.66%
Im waiting on an estimate from 2 contractors(referred by other investors) for the roof but based on their experience it will probably run around 6,000. if its a standard shingle replace.
My first feeling on it that its lacking but Ive been running #'s for the last year in this area and the comparable have been around 130-137,000. It seems like most of these listed properties have been sitting on the market for awhile with the seller just waiting for the retail buyer to come through. Im not sure that I can find anything better without having to manage a rehab which I dont have time for with a 20 mo. old and my wife due in a few weeks.
Any gut feelings? Thanks,
George