Live in Duplex analysis

2 Replies

Hi All,  I've never used this analysis forum before and thought I'd give it a try.

I'm looking at buying a duplex and living in one of the units while renting the other.  The unit is in a great part of town (Sioux Falls) and is relatively new (2007). The units are in good shape and can basically be rented immediately.

Here comes the number dump.
PP - $219,900

DP - ~5% - $11,000

Mortgage - $13,75 (which will be less while I live there as taxes will decrease)

Rent $950-$1,000

Vacancy - 10% - 1140

GOI - $10,260

Insurance - $800

Repairs - $1,000

Advertising - $100

Expenses with the loan / month are about $1535

Total expenses  including loan 18,400

Now obviously when I live here I'm (losing money) as I'm paying to live there which is fine with me as it costs about the same as it would to live in my current house (which I'll also be renting out).

After I move out I will rent both sides. for about $1,000 each making the GOI - 21,600 leaving about $3200 or 266.66/ month


At first glance, I see that the GOI would be $1,900+ with both sides rented out. The 50% rule would leave you with $950 to pay the mortgage in order to break even. Your mortgage payment is $1,375 per month, which would be a $425 monthly deficit even if both sides are rented out. However, your run down of expenses show only $570 per month instead of the $950 estimate from the 50% rule. Are property taxes, utilities, garbage removal etc. included in that "total expenses including loan" number?

I'm new at this, so forgive me if I'm just plain wrong. I understand how you got $266 per month cash flow with these numbers. I just am confounded as to how the expense estimate is so low. 

Is there a veteran who can confirm or clarify this? Good luck!

I did mistype on the GOI so thanks for catching that. As far as taxes, yes they are included. Utilities are all separate metered and will be payed by tenant