[Calc Review] Help me analyze this deal please

[Michael Balcom]

Hello BP! 

I hope wherever you are right now, you are having an amazing day! I am working on a deal and need a little help. This is my first deal since joining bigger pockets and study real estate like my life depended on it! Below you will see my calculations for a duplex in South Florida, concrete block, 3/2 on each side. This would be a buy and hold investment. 

Here is a link to the report as well: 

View report

I was texting with the seller yesterday (FSBO) and asked him the following questions:

1. What is each side rented for and for how long?

2. Do any repairs need to be done?

3. Why are you selling this property?

This was his response :

I looked up the tax records and he bought it in 2009 for 83k.

I am thinking of offering 190k cash or 215k with seller financing. Please let me know your thoughts on all of this. I am open to any and all suggestions! 

Thank you,

Mike

[Luke Sanderson]

Michael,

I think your Capex, repair, and insurance estimates are probably too low. I'd bump your Capex and repairs to 10%, and get an insurance quote from whichever company you plan to use for a more accurate calculation. Are there any special insurance types that are recommended for Florida, such as hurricane/natural disaster insurance (I don't invest there so I have no idea)? Might be something to look into. I'd also set aside at least $5k for initial repairs, no matter what the seller says. Once your inspection comes back there will be things that need fixing.

I can't advise on cash or seller financing offers since I have no experience with them, but those are my intial thoughts looking at your analysis.

Luke