Duplex in Bakersfield CA

[Walter Milam]

Hello all, 

I am about to close escrow next week on a 3/2, 2/1 duplex in Bakersfield CA. It is located in Oildale, a "rougher" part of town. Fortunately, it is in the north side (north of the river), which has seen some great development commercially and residentially. The duplex has laundry rooms in each unit and tile (wood looking) throughout. The roof is 2 years old and the AC units look great. 

This will be my second rental property, the other was my first home now rental for the last year and a half. 

I excluded ROI or any other calculation in this post so free feel to include that in your comments if it has some bearing on something I may be missing.

The details:

Purchase Price: $225,000 (down from an asking price of $240k)

On the MLS for 6 days at the time of offer.

25% down (my own savings) ($55k)

Closing cost (7k)

62k total closing cost

4% investment property loan through aimloan.com

Projected monthly mortgage (with impound account): ~$1108. 

Water: ~$50

Lawn Care: ~75

Rents: 3/2 - $1000, 2/1 - $875

Total: $1875 from rent

Monthly Cashflow (excluding budgeting for repairs): ~$650

Thoughts? Concerns? Congratulatory jubilation?!

Thank you for reading and commenting,

Walter

[Aaron Montague]

@Walter Milam

Yeah, this one looks like a deal that will just barely keep its head above water.  The major calculation you didn't make is vacancy.  Is there a PM/Master/Owner's electric box?

Here is how I see your deal:

% Down Payment	25.00%
Down Payment	$ 56,250
Remainder of closing costs	$5,500.00
Total Due at Signing	$ 61,750
Mortgage Rate	4.00%
Length of Mortgage in years	30
Monthly Mortgage payment	$805.64
Taxes	$ 180.25
Sewer and Water	$ 50.00
Trash	$ -
Heat/Utilities	$ -
HOA	$ -
Cap Ex and Ops	$ 275.00
Insurance	$ 125.00
Mgmt Fee	$ 185.00
Vacancy	$ 148.00
Total Expenses	$1,768.89
Unit 1	$ 1,000.00
Unit 2	$ 850.00
Total Revenue	$ 1,850.00
Cashflow/month	$ 81.11
Cashflow/year	$ 973.34
Cash on Cash Return	1.58%