[Calc Review] Help me analyze this deal

[Brian Power]

Hello everyone,

I am new to BiggerPockets and new to real estate investing, I currently own a duplex (living in one unit and renting out the other). I am looking to start analyzing different deals in my area. I have watched several of the webinars and have listened to countless podcasts. I really want to try and start working towards owning more rental properties and wanted to start by analyzing more deals.

I found a property, Duplex 3 bedrooms 1 bath per unit, in my area and have gone through the Rental Property Calculator. What I received was something a little bit over the 2% rule. I'm not entirely sure if I am doing things right or if this truly is the case with this property. Any advice on how to "double check" if what I used for numbers is correct?

Thanks all and excited to start this style of investing,

Brian Power

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*This link comes directly from our calculators, based on information input by the member who posted.

[Shawn Ackerman]

@Brian Power Great property for the price. However I believe that it was intentionally listed low $59.9K to create a bidding war. I offered $70K cash, no contingencies and close in 10 days and it wasn't accepted. That property is a couple of blocks away from the desired Wauwatosa area. That's a complete different ball of wax. With that said, I think your numbers are a bit off. The roof alone on this property would need to be replaced, in my opinion within the next 3 years or less. I'd attach an $8K-$10K price tag on that. Also interior cosmetics were about $9K. I believe the ARV to be somewhere in the ballpark of $115K-$120K.

To the numbers.....

Management fee, I would suggest reserving 10-12%

Routine maintenance 5-7%

Capex(it's an older home) 10-12%

Insurance appears to be on point however water on a duplex runs about $145.00 per month.  However that may vary.  Many of my duplex stay within $145-$165 Per month.

closing cost would run about $1K

All in all, this is an amazing deal at $50K considering the location.  you go a few blocks south and the prices drop dramatically and same goes for the values.  If you are looking for a buy and hold play, you are looking in the right area.  

All the best to you!!!! Always remember to persist and you will WIN!!!