What do you think of this property?
I called a craigslist ad that I saw today for a duplex and here is the info on it.
It is being sold by a rehab investor so the entire property is rehabed. It is currently empty but one unit has only been empty a month and the other one week. When I called the seller he was in the process of showing it to a potential tennant.
List price is $31,000
He is looking to rent the units at $495 a month and in the past they were at $525.
Numbers if both were rented at $495:
GSR at 100% = 11,880 a year
Expenses: Taxes= 1,800 a year, Insurance= 610 a year, Applying a 15% loss for vacancy and repairs= 1,782
Tennants pay water, gas and electricity.
Gives me $7,688 NOI
25% down (around 8k) gives me debt service of $1,248 a year.
I'm showing cashflow around $6,400 a year.
Now is something wrong with my math or am I missing something here because it sounds too good to be true. My analyzer that I'm using is popping out a 23% cap, 65% cash on cash, and 5.39 debt coverage ratio.
What's going on here?