Tucson Duplex Numbers

8 Replies

Hey BP community! I’m in contract on a duplex in Tucson and want to get some feedback on the numbers I am running on the property. What do you think about area & cash flow potential, and should I consider renting units on AirBnB? Property Details: 2830 N Park Ave, Tucson about 10 mins north of downtown and the university of Arizona. Duplex with separate 400 and 500 ft^2 unIts on the same lot. The larger is currently rented for $550 and the smaller one for $500. It needs a new roof on the back unit and front roof needs repairs. The front unit is livable but could use a cosmetic update. Both small units have wall HVACs (Is that sufficient for heating/cooling?) Property Numbers: Purchase price $108.5k w/ 20% Down loan at 4.75% gives me a $453 payment for principal and interest. Reno Costs: $3500 roof + $15k cosmetic update + $4k for other improvements/buffer = ~$24k Rent: $550 and $650 after repairs and updates with 9% PM fee, 8% vacancy. Other Numbers: 1200/yr property tax, $900/yr insurance, $1200/year MX/CAPEX, $250/yr eviction/lease renewal After running numbers, I’m seeing potential to cash flow $88-$256/month depending on how much units rent for. Also seeing between 2.75% and 6% cash-on-cash year 1. What am I missing? Would you move forward on this deal? Thank you! -Trevor

Hey Trevor I'd like to follow this post, I've been looking in Tucson as well.  AS for your property just out of curiosity did any of the following apply or get addressed?:

asbestos?

Lead paint?

Sewer line inspected?

How much for central air, would it improve rents or too much expense for the rent you'd get?

Is the realtor you're using familiar with helping investors and purchases of multi units or a general agent?  

Best of luck Trevor!

Quick thoughts:

Seems low on roof and prop management but that is northea$t me talking... 

Rent to purchase price looks fine to me in this market with 1200 in rent and roughly 125K total cost.  

If you are a long term buy and hold thinker id roll with it... 

Airbnb same old story - can prob get better returns... but you will work for it. 

Hey Trevor,

If the numbers hold true (which I think you have valid reason to think so) the deal looks good. The area is not bad and although I'm not too sure about the Air BnB, it wouldn't hurt to try. An Airbnb that I stayed at was in a 'local' area, but it was close to downtown and the Bnb was really cheap, so you may have an opportunity there. 

Thanks everyone for your feedback! The property is pretty neglected right now but I have high hopes for it after we get all the deferred maintenance and renovations completed. What do you think of the area in general? To the north there are some rough patches but that area seems to be gentrifying from what I've seen.

@Jim Sestito we are getting estimates from multiple contractors to make sure we are sticking to our budget. Property management will likely be closer to 10%

@Naftali Tolibas I am considering using one unit as an AirBnB. Others in the area have told me they have great luck in that area, but I'm unsure if I want to be actively involved in AirBnB or go the more passive route with a long term rental.