# [Calc Review] Help me analyze this duplex deal

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

Nice cash flow on a duplex there. With that area, should be good on renting as well. The ARV shows as 10k, guessing that is an error. Unless your self managing, that management cost is low.

Looks like a home-run

The 5% down leads me to believe that you intend to house-hack this property, @Charemon Tovar . Is that correct? I'm also assuming that your analysis represents both units being rented. Understand that you will have to intend to live here for at least a year in order to qualify for a low-down payment, owner-occupied residential mortgage. You should run your numbers both ways, so you know what you're getting into.

• Closing costs look very high, but they are local. What has your lender told you?
• Hopefully after spending \$316k, your ARV is higher than \$10k...
• One unit is currently for rent at \$1425. What makes you think you'll be able to get \$1500?
• I use 8% vacancy in my underwriting. This is very local, though.
• You're forgetting CapEx. I use 15% combined with repairs.
• You're never getting management at 2%. Probably 10-12%.
• According to Zillow, taxes are \$266/month.
• What about insurance, water/sewer, lawn care, and snow removal?
• I bet you can find a loan without points.
• With only 5% down, you will have PMI, though.

You will want to add 5-10% for Cap Ex depending on the current condition of the property. There is not an expense for insurance that I can see either. I see that you are figuring 2% for management, so I am assuming you are going to self manage?

I know it seems low, but I have a SF rental there now and my property management company that charges half the first month's rent and then \$50 a month through the lease term. Anything else in the numbers look off? I am most concerned with paying too much for it but can't find any good comps. The duplexes in the area don't seem to turn over very often.

Looks optimistic but a good deal none the less. I'd plan on cashflowing half of what these numbers project for the first few years at least.

Originally posted by @Charemon Tovar :

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

I don't see any capex allotment.  I generally use 30% for vacancy, maint, and capex.  \$300k for \$3000/month in rent is to expensive for me.

Thanks to all and especially @Jaysen Medhurst and @Josh Buchanan . I have updated the analysis here: https://www.biggerpockets.com/calculators/shared/949329/e5ac275f-6571-4da0-a557-f3a27e03d197

I have added the R&M, Cap Ex and the updated property taxes. I have a property management company (I mentioned this earlier in the thread) who is trying an "innovative' approach to their fees so this is actually correct. Finally, I am hoping to get an owner financing deal so it would be 5%/15% for the down payment on a conventional loan. If you would take another look, please let me know your thoughts. I am a bit concerned that it is now too conservative? But please LMK. Thanks again.

I think those #'s are getting closer. You can probably back off of CapEx to 5%, but need to add your insurance expense. Not sure what it would be there, but I would assume a minimum of \$100-150/month. Also with the management company charging 50% of the 1st month rent, I would amortize that out and use at least 5% on the management expense. That should get you close. Pay attention to your cash on cash ROI and see if it aligns with your goals as well.

@Josh Buchanan will do and thanks again!

@Jacob Sampson what is your average range of acceptability/tolerance for these numbers?

@Charemon Tovar , I would still analyze this using standard Management costs (10%). Your "innovative" PM may find very quickly that they are losing money hand over fist or they may just suck and you have to fire them. What then when your management expense quintuples?

• You can probably pull back CapEx and Repairs to 15% combined.
• As @Josh Buchanan mentioned, you're missing insurance.
• What about water/sewer, lawn care and snow removal?
• Your interest rate is probably a little optimistic, unless you plan to owner occupy.

Finally, you need to better account for the 15% owner financing. Very unlikely that you're going to get terms as good as a bank. I calculate your monthly debt service at \$1668 [\$1146 (bank - \$245k, 4% for 30 years) + \$522 (owner -\$45k, 7% for 10 years)].