Property Analysis - Can we discuss??

4 Replies

Duplex for sale: 2- 2X1units - slow appreciation area small town in SC

Purchase Price: $137,900 Down Payment: 25% - I was told that I'd have to have 25% down for an investment purchase(Big Bank - still shopping around)

Loan Amount: $105,000

Intrest Rate: 5.5%

P&I: $596.18

Taxes: $72

Insurance: $48

ARV: ~150,000 - $160,000 - I based this off of the price of the surrounding properties

Both Units currently rent for $560- which is significantly lower than market, so would look to increase to at least $750 per unit = $1,500 monthly.

The property is NOT in horrible condition, and I know that the properties are rentable without rehab, I'd budget approximately $7,000 to rehab and get the units more up to date for higher renters.

Trash, utilities, water and sewer - expected to be paid for by tenants

Potentially will hire a local PM to manage the property

Also, hoping I can get down on the purchase price as well..

I tried using the BP calculator but not sure if what came out was good or bad.

Thoughts??? RUN?? Or make a deal..

Hey LaRhonda, I don't see any calculations here...did you forget to attach it? It's always super helpful if that's attached as it saves folks from having to do the calculations for you. Also, just make sure you account for PM fees, reserves/cap ex, maintenance in your monthly cash flow projections. Also, the 5.5% seems SUPER high for whats going on right now in the market. Lastly, where did the $48/mo for insurance come from? It seems quite low.  

Originally posted by @Michael Albaum :

Hey LaRhonda, I don't see any calculations here...did you forget to attach it? It's always super helpful if that's attached as it saves folks from having to do the calculations for you. Also, just make sure you account for PM fees, reserves/cap ex, maintenance in your monthly cash flow projections. Also, the 5.5% seems SUPER high for whats going on right now in the market. Lastly, where did the $48/mo for insurance come from? It seems quite low.  

Ah, didn't realize I could add a .pdf, can I go back and add (although, I wasn't 100% sure if it was correct)??? and yeah I thought 5.5% was very high too especially with having a 790 Credit score - so getting multiple quotes. The $48 came from a Zillow estimate of the insurance cost. 

I always use 1% of the purchase price as a starting place. Especially since as an investor, you’ll want to have high liability limits. The Zillow estimate assumes you’re living in the property

Originally posted by @Michael Albaum :

I always use 1% of the purchase price as a starting place. Especially since as an investor, you’ll want to have high liability limits. The Zillow estimate assumes you’re living in the property

Ahh.. that makes sense.