Sorry about the formatting. Let me try that again
Duplex, 4 bedroom 2 bathroom
Cinder block walls
A/c wall units
Listed at $50k
would shoot for a 15-25k price. It sold in 2014 for 37500 and looked a lot better then.
But let's say $30k
Would do a renovation loan for $43k at 6.5% (80% of price, 23k+ 15k rehab cost) assuming financing comes through
Rehab cost $15000
Purchase cost 3%
Maintenance 12% -$1872
Cap ex 10%- $1560
Vacancy 10% - $1560
Gross rent $1300* 12
So what is your take on this property? Does any of the numbers look way off or throw up red flags ? Thanks for your time.
@Kevin Olano - a few things:
- your Maintenace % is high, especially if your planning to do some rehab upfront
- verify the taxes (via county property appraisers site) & insurance (via requesting a quote from a broker). The insurance broker will also tell you if flood insurance is required.
- loan amount: most banks won’t provide a mortgage loan for <$50k. If you have found one that does, PM their contact info.
I have a spreadsheet on my site focused on tracking income expenses for small MFRs. check it out.
I was trying for worst case with the 12%.
Seems as though you have some experience in these kind of rentals. How are the tenants usually? Any glaring issues that stick out?
Does it look like a good deal? What about at the 50k asking price?
I spoke with a few property managements and they tell me vacancy is usually low because it cost that much more to be evicted. With that said one rent roll I looked at for another property has several tenant that were months behind on rent.
Also could you point me to the spreadsheet? Couldn't find it with a search. Thank you for your time.
I'm not a big fan of duplexes in low income neighborhoods, I own a couple and a good tenant in this price point will just go to a single family home. Leaves you with a tough crowd. Maybe close to LSU will be a benefit. Remember this is just my experience dealing with a portfolio of both single family and duplex B to C properties, overall it has been a good gig