Duplex near downtown analysis correct me if I'm wrong.

Jonathan Perez
Rental Property Investor from Jacksonville, FL

posted over 5 years ago

So I have 2 duplexes near downtown that I'm interested in. I'll do them both in separate posts but here's the first one.

FINANCING WITH FHA

3.5% down

Interest rate at 3.75%

30 year

*********************

2 bed 1 bath each side

DUPLEX ASKING $124,000 (I ANALYZED AT A PURCHASE PRICE OF $110,000)

GROSS income - $1,325

MORTGAGE (insurance and taxes included) -
$710

(Tenant is responsible for all utilities) EXCEPT owner pays sewer and trash.
I put down $50 for that.

VACANCY 10% - $135

REPAIRS + MAINTENENCE - $70

CAP EX 5% - $120

PM 10% - $135

Not sure I got the cash on cash and cap rate right but this is was I got;

CASH ON CASH - 3%

CAP RATE - I got 84%

Let me now what you guys think. I feel like I did it right but would ya'lls thoughts and opinions. Thank you

Kyle Scofield
Real Estate Investor from Madison, South Dakota

replied over 5 years ago

@Jonathan Perez After you subtract all expenses ($1220) from Rent ($1325) you have $105/month or $1,260 annually. This CoC return is 32%.

Cap rate is NOI/Value of Asset. Sooo $1,260/$110,00 in this case is only 1.1%

If your numbers are accurate for your area, then that's what your numbers would look like. Although it looks like your repairs and maintenance are only 5% of your Rent.. (usually recommended to include 10-15%, same with CapEx.... But then again, you are the expert in your own farm area.)

Any further questions, just let me know!

Jonathan Perez
Rental Property Investor from Jacksonville, FL

replied over 5 years ago

@Kyle Scofield thanks for responding man, I appreciate that.

So of course these numbers are at the purchase price of 110k, I should purchase at a price that obviously makes more sense. 110k would be over paying, I'm assuming right? I just ran it really quick on a purchase price of 95k and the cash flow went up from 105 to 125.

I do plan on house hacking it like you did as well.

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