First deal potential, thoughts?
I’ve been sitting on the sidelines waiting and searching for a deal and I think I might have found. To give a little information it’s a duplex, each side is one bed-one bath, completely remodeled in 2016 with new kitchens bathrooms, oak hardwoods. Newer roof, electrical, vinyl windows, and doors. Current owner says both sides rent for $1100 a month, and based on that area it seems about right. My idea would to househack for a year or two then keep this as a rental. One unit already has a tenant. I’m currently rent and am sick of throwing money away every month. This is a nice neighborhood in metro-Detroit. No garage and current rental cert. with city.
Here is my analysis:
Purchase Price: $219,000
Taxes: $2160 per year ($180 monthly)
Insurance: $996 ($83 monthly)
Capex: 7% ($154 monthly)
Management Fees: $0
Electricity: $100 Monthly (Tennant will pay own electric and gas)
Gas: $50
Water Sewer: $25 Monthly
Repairs & Maintenance: 5% ($110 Monthly
Vacancy: 3% ($66 monthly, hot area in Metro-Detroit)
Monthly gross income: $2200
Down Payment 5%: $11,000
Estimated Closing Cost: $4300
Total Down: $15,300
30 Year Term @ 3.4%
Once I move out I estimate the monthly cashflow with be $519 per month possibly more without utilities cost. I calculated the expenses to be $1680 monthly and cashflow to be $2200.
My CoC ROI is 40.87%
Proforma Cap is $7.90
NOI is $17,304
Any thoughts or feedback would be appreciate, this is my first deal analysis post so I’m sure I’m missing a few things.