[Calc Review] Help me analyze this deal

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I just got this offer accepted. Is for a duplex earning $1200 (Unit A) and $950 (Unit B). Separating 5% for operating expenses the ROI in 9%. Do ya'll think I should keep pursuing this?

@Juan Rosado

Short of being able to negotiate the price much lower and/or significantly raise the rents, this deal is way too thin and could easily be derailed with a couple unforeseen or untimely expenses.

If you yourself are having second thoughts at this point, paired with the projections you've provided here, is certainly enough to convince me that you're better to move on from this deal. Best of luck with your decision.

@Brandon Roof

I second this.

Is that rent accurate? Is it currently rented at that?

I noticed you used 5% apr.. can you get that down?

Is there another angle to this deal other then straight cash flow? Are you expecting an above average growth in equity in the next 12 months? Is there opportunity to build equity through value add Reno's?

9% cash on cash is ok(that's a soft ok) as a stand alone number, but the risk vs return here seems way off balance from just those numbers.

Just my input hope it helps 😊

Santi

You're also using a 3.5% down payment loan...are you planning on getting an FHA loan and house hacking? Otherwise would love to know the lender you're using that will give you that much on an investment duplex!

Originally posted by @Santi Anso:

@Brandon Roof

I second this.

Is that rent accurate? Is it currently rented at that?

I noticed you used 5% apr.. can you get that down?

Is there another angle to this deal other then straight cash flow? Are you expecting an above average growth in equity in the next 12 months? Is there opportunity to build equity through value add Reno's?

9% cash on cash is ok(that's a soft ok) as a stand alone number, but the risk vs return here seems way off balance from just those numbers.

Just my input hope it helps 😊

Santi

Unit A rents for $1,200

Unit B rents for $950 (but could get a higher number according to the market)

Quick question, why did you pointed out the 5% APR? That what my lender gave me on this FHA loan (I plan on house hacking).

Yes the numbers are too thin. I might as well just keep looking. Thank you.