# First Duplex Analysis

4 Replies

I am using a spreadsheet to help run my numbers. My family plans on buying a duplex-quadplex to house hack in Memphis (property taxes and insurance are high here). My assumptions are:

Rent/month \$2,350 (both units rented, really \$1,200 while we live in one unit).

Mortgage/month \$1,422

Vacancy 9% rent/month \$212/month

Maintenance and repairs 5% rent/month \$10/month

Capex 10% rent/month \$20/month

Property management 12% rent/month (for when we move or don't want to self manage)

Property taxes 2.1% purchase price \$524/month (I know you can find the exact numbers, but this spreadsheet is meant to examine other properties and that is the average based on multiple properties).

Insurance 1.15% purchase price \$287/month (I know you can find the exact numbers, but this spreadsheet is meant to examine other properties and that is the average).

Tenant pays utilities

Cash flow \$2,350 (rent) - \$2,757 (all expenses) = -\$407/month

What am I missing? Am I overestimating some of these expenses? I know the best way to make the numbers work is to pay less for the property. But in order to cash flow \$105/month, I would need to pay \$231,000 for the above property and with the market how it is, I do not think that would happen. When I update the spreadsheet for a SFH, I still get negative cash flow. Everyone says Memphis is a buyer's market, but I'm not seeing that based on my numbers.

hey @Josh Day first come to mined is that you are well bellow the 1% rule. with Memphis's high Taxes on MFR this will not cash-flow.

Your property management can be 10%.

vacancy in that area, if in good parts, and the units are modern - you can work with 8%

Same with Capex

Yes, especial in this area it is VERY hot market and most deals don't stuck up.

It is best if you use the BP Property investment Analyzer to get a full proforma report. im not sure if you have access to it or only Pro and Plus .

It is not a good deal, your rent to property value is far too low.

I would pass as it will never have positive cash flow.

Hi Josh

Hopefully you have had luck finding a duplex in memphis. I am looking for one currently and haven't been able to make the numbers work either. The market is really hot right now, but i am still looking.

No way man, buy it! Rents only go up and you'll be able to refi in 3 years, guaranteed!

No. Just Kidding. This is a pig. Run away.

### Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing