I'm looking to invest in out of state property and would like to run the numbers with experts. I'm trying to find the balance between risk and reward. CoC return is not that high and Rent is about 0.9%, closer to 1% rule but on on lower side.
About the property: It is a duplex, Newly build so assuming no major capex expenses in next 10 years. Also expecting monthly expenses to be much lower. Current calculator exclude lease renewal fees of 70% of first month rent by property management. My current calculator assumes 7% vacancy rate and 5% capex. It also has 8% mgmt expense. Given I'm looking for buy and hold for over 10 years would you recommend this deal as good deal.
If I assume conservative 1% appreciation and 2% rent increase, I get around overall 9.5% return over 10 years. This may be feasible to achieve with S&P over that period.
FYI. It is a large scale duplex project by developer with around 40 duplexes in community.
Location : (OKC investor please comment about area if you are familiar with this)
I was born and raised in OKC, and I am an active investor and real estate broker myself. The area you circled on the map has never really taken off and is not favored by local investors.
I'll send you a PM. I think I know what property/ development you are talking about. If it's the duplexes I'm thinking about it may not be realistic to get the rent that high. As Richard mentioned, it's not really the area people are looking to move to. It could change with the new development, but as of now there isn't much around there to draw in renters.
Cassi and Richard are spot on for the rents in that area. Probably not going to be what you have on your spreadsheet. I would steer clear of anything in that area for that high a sales price, even if it is new.
That is, if the spot you have circled is correct.
i manage several multifamily in that neighborhood and area give me a call if you want more info