Updated over 6 years ago on . Most recent reply
Help me analyze 2 properties
Hey Everyone,
I need some help! Help me analyze these two Duplex Properties. Which one should I buy and and why? Or should I get both.
These are the numbers that I have been using to help me make the decision. Am I missing anything? Thanks!!!!!
134k- Converted duplex
built in 1920’s
Semi Updated
Average Neighborhood/Ave Schools
1600 Sq Feet
1 Bed Unit upstairs and
3 bedroom downstairs
20%- $26,800 down payment
PI Payment $592
Taxes-$333
Insurance- $91
Total Monthly Cost-$1017
Rents $1550
Total Cash Flow-$533
Cash Flow per door - $266
20%- $26,800 down payment
$7000 max in Rehab work
Total cash needed $33,800
Annual Rents - $18600
75% Less Variable Cost- $13950
Interest Paid annually $5620
Rent less cost minus int-$8322
NOI/Total Cash- Cash on Cash- 24.62%
250k- Duplex
built in late 80’s
Semi Updated
Good neighborhood/good schools
2400 sq feet
Two 3 bedroom units
20%- $62500 down payment
PI Payment $1035
Taxes-$395
Insurance- $108.33
Total Monthly Cost-$1539
Rents $2200
Total Cash Flow-$660
Cash Flow per door - $330
20%- $62500 down payment
$7000 max in Rehab work
Total cash needed $69500
Annual Rents - $26400
75% Less Variable Cost- $19800
Interest Paid annually $9843
Rent less cost minus int-$9956
NOI/Total Cash- Cash on Cash- 14.33%
Most Popular Reply
@Jaron Walling you make a strong point. Yes a true %24 COC return would be exciting to me. But a property purchased for $134k that rents for $1550 is not going to generate the numbers he is talking about. Here is how I look at things.
I pay 60 X monthly rent for a property in rent ready condition in a C+ or better neighborhood. So if it will rent for $1000 I will pay up to $60k for the property. If it needs remodel then that brings price down.
I consider true cash flow to be rent - 30% (vac, maint, and cap)-PITI = actual cash flow.
His numbers don't have any vac, maint, or CAPEX built in.