Two-Family Analysis (making an offer)

[Dave Kennedy]

Lets assume you have $1500 in cash after all opex (maintence, taxes, utilities, insurance) is deducted. $100/unit income also deducted.

What are you willing to pay? Do you just plug it in according to debt terms?

$1500/ mnthly payments
30 yrs
6.0%
= 237k loan value.

If you are putting 10% down then the maximum offer is 237k/.9 = 263k.

Am I doing the math right?

Also, what if you expect the property needs some work. Update kitchen and baths. Lets assume $20,000 in renovations.

Would you deduct that from your max offer and call it "deferred maintenance"

So 263k - 20k = 243k is maximum offer

Am I on the right track?

Thanks!