Allentown Duplex Deal Analysis

14 Replies

TLDR - 92k asking, 25% down, duplex, 1500 rent , 1200 expenses

Good morning all.

I have an off market deal that I was hoping to get a little feedback on. 

I believe this should net me around 125-150 per door.  The property is currently rented and in livable condition.  The first floor could use a solid cleaning and minor painting such as kitchen cabinets.  the second floor is kept VERY clean

Any criticisms would be greatly appreciated!

Property Details:

Location - Northside of Allentown, Pa

Size - 1700 sq ft

Units - Unit 1 - 2 bedroom, 1st floor and basement.   Unit 2 - 2 bedroom, 2nd floor

Shared Areas - Backyard

Tenant pays heat/electric

Landlord - water/sewer/trash

Numbers arent bad. I am in this market also. Your expenses are conservative and responsible. Only thing I see missing is if there is any common area electric.  I also factor in 10% vacancy.

Originally posted by @Joe C :

Numbers arent bad. I am in this market also. Your expenses are conservative and responsible. Only thing I see missing is if there is any common area electric.  I also factor in 10% vacancy.

 Okay thanks.  This one is nice in that there isnt any common electric.  Each unit even has their own exterior entrance. 

And I'll bump up vacancy the extra 50 to make it 10%.  Thank you

One thing that I've changed about my calculator that wasn't factored in before is closing costs. That is going to hurt your CoC return a little bit. Did you roll it into the mortgage?

Closing costs brought me down almost another two full percentage points. 

Also, be sure that you are able to get a 30 year mortgage on this. Most investment property loans are going to be on 20 or 25 year schedules.
Originally posted by @Dillon Leider :

One thing that I've changed about my calculator that wasn't factored in before is closing costs. That is going to hurt your CoC return a little bit. Did you roll it into the mortgage?

Closing costs brought me down almost another two full percentage points. 

 Yes, i added in i believe 4k for closing costs and 1k for immediate repairs.  And thanks!

Originally posted by @Jason DiClemente:
Also, be sure that you are able to get a 30 year mortgage on this. Most investment property loans are going to be on 20 or 25 year schedules.

Yup! Aiming for 30 year fixed

depends...what do you consider to be North End?     May be overpriced?  (depends on condition).

This would be N 6th st near sumner ave. And besides for the few cosmetic issues, very good shape

Usually in that area we try to be all in for under $35k a unit but if its been really well maintained, your numbers are ok. 

Okay thanks.  This is essentially turnkey as both units are rented and the only work is just the downstairs updating

Mark, generally looks good. I usually budget 10% capex and 10% property management. Since you budgeted miscellaneous it should come out very similar. Good luck!

@Mark B. If you plan to hire a property management company, they will charge you 10% for a property this size. So you'd have to add another $50 to your expenses budget. If that number is there for the "show" and you plan to self-manage then you're Ok. 

Also, I suggest to shop around for mortgages and insurance when you get to that point - as you may get very different terms. Call companies (banks and insurance) directly and then compare them to broker's responses as well.

If I can be of further assistance please let me know.

Best of luck!

Alina - Im going to be using the manager I currently use, she charges 50 a unit at the moment. 

As for the banks and insurance companies, will do! 

Do you have any companies you've worked with that you like?

Good luck big man! Let me know if you need any help. 

I also include legal/accounting fees and landscaping, unless your property manager is responsible for those items.

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