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Real Estate Deal Analysis & Advice
Account Closed
  • investor
  • McDonough, GA
76
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230
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Please help me learn to analyze a property

Account Closed
  • investor
  • McDonough, GA
Posted Oct 13 2015, 06:03

I am trying to learn how to analyze rental properties. Below are some numbers that I put together for a duplex I'm looking at. Built in 1987. Each unit is 2 bed, 1 bath, about 1000 sq ft. Both units are currently rented. As far as I know the property doesn't need any repairs. I would appreciate any help or advice. I'm not sure I am doing this correctly.

Purchase Price $126,000 

ARV $150,000? I sent my broker a request for info on actual value

         Zillow says $170,000 but that's too high

         The county assessment is $94,800

Down Payment (20% of $126,000) $25,200

Closing Cost (2% of $100,800) $2,000

                      I’m guessing on the 2% closing costs, maybe it would be higher

Mortgage $100,800 for 30 years @ 5% $541 per month

                 I’m guessing on the 5% rate

Annual Mortgage Expense $6,492

                                           $541 x 12 months

Gross Annual Income $16,800

                                    2 units @ $700 ea per month

                                    $1,400 x 12 months

Taxes $1,855

Property Management Fee $1,008

                                            2 units @ 6%, $42 ea per month

                                             $84 x 12 months

                                             This doesn’t include a placement fee

Insurance $700

Lawncare $960

                 2 cuts per month @ $40 ea

                 $80 x 12 months

                 I assume that lawncare will be the owner’s responsibility for a multi-family

Vacancy Rate (8% of $16,800) $1,344

                        $16,800 x 8%

                        about 1 month per year, per unit

Maintenance and Repairs (5% of $16,800) $840

                                          This percentage is subject to change after I inspect a property

                                          and see the age and condition of things

CAPEX (5% of $16,800) $840

             This percentage is subject to change after I inspect a property

             and see the age and condition of things

Annual Cash Flow $2761

                              $16,800 Rental Income

                              - $6,492 Mortgage Payments

                               - $1855 Taxes

                               - $1008 Property Management

                                 - $700 Insurance

                                 - $960 Lawn Care

                               - $1344 Vacancy

                                 - $840 Maintenance and Repeairs

- $840 CAPEX

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