Duplex in Lebanon, NH
Good afternoon, fellow BP'ers!
My wife and I have lived in the area for a year now and I have interested in purchasing property due to two factors - 1) Dartmouth College next town over and 2) Dartmouth Medical Center just up the road, both supplying a high number of tenants. I have been watching the MLS and found one duplex that was listed at $200k several months ago and just came back on the market at $175k. I am not ready to put in an offer and have not confirmed the numbers yet, but here is what I have calculated for practice. The biggest issue I see in NH are the high property taxes - I'll have to offer much less than asking price.
Property is in good condition and would probably need $5k in cosmetic repairs. I would love to hear your thoughts on the potential that this property has.
Total Current Monthly Rent $2,400
Purchase Price: $140,000
Down Pmt: $28,000 (20%)
Closing/Holding Costs: $3,000
Morgage Pmt: $550 (4%, 30 yrs)
Taxes/Insurance: $625
Prop Mgmt: $240 (10%)
Repairs/Maintenance: $240 (10%)
Vacancy: $240 (10%)
CapEx: $168 (7%)
Water/Sewer: $83
Lawn/Snow: $42 ($500/yr)
Electric is subdivided. $0
Oil possibly one heater. Current expenses are $7k per year, seems very high.
Current Cash Flow: -$371
I've done some research and it looks as though to install two separate propane heating systems is about $10k. I could upgrade the units to a Rannai system in order to remove the current $7k oil costs.
Cash Flow with Tenants paying heat: $212
[Expenses per MLS Listing (Assuming annual)
Insurance: $2,033
Heat: $6,912
Water: $980
Snow Expense:350
Maintenance:1,650]