help me build confidence in my analysis

3 Replies

Im new to multifamily and looking for one on the west coast. Found this is Boise and ran some numbers. Please help me confirm that this is a bad deal. My logic says that its inexpensive for local duplexes on the RMLS for a duplex and there are multiple offers already, but why? it doesnt seem to pencil out for me. Are my reserves too high? rents cant go up too much more currently. it appears to be turn key. with some outdated appliances but functional. asking/offer price 245k/250k actual mo income 1550. (775 per side, 850 might be possible) EXPENSES mortgage 1100 taxes 258.3333333 ALLOWANCES/Reserves vacancy 110 maintence 110 managment 110 capex 110 annual expense 20260 annual income 18600 cap rate -0.00664 noi 18600 why is someone even making an offer on this? or am I way off in my evaluation thanks for you insight

It's a terrible deal.  Don't waste any more time on it.

@Ken Vogel it's not very good. I would research a common term here called the rent to value ratios. You deal is well under 1%.

@Ken Vogel - The Boise market like a lot of markets is extremely hot right now. People are still investing because, like you, they see a hot market that's still affordable and they are betting on appreciation and rent increases. Like any market, there are areas/neighborhoods that are very expensive, so if this property was in one of those areas, it's a fantastic deal and is under-valued. Mostly though, if it's on the MLS, investors are either getting in a bidding war or overpaying.

If you ever have questions about the Boise market, don't be afraid to reach out! 

Create Lasting Wealth Through Real Estate

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

Start here