First Duplex numbers check

[Joshua Woods]

Hey everyone! Just had a counter offer on my first duplex. Do my #s make sense? Two 1/1s in AZ.

134k purchase with 4k closing to me.

25% (32500) down payment

Current rents are 800 and 650. Utilities included (🤮, I know) average $350. They are at least 100 below market rents. The 650 side needs some love in the form of carpet, paint, some cabinet doors and a few other cosmetics and is on a month to month lease, the 800 side is good and just signed a 1 year lease. I used about 17% total rents for capex (5% vacancy, 5% mx, 5 and some change for other) which is about 50% total income after PITI and utilities.

1450-570(PITI)-350(utilities)=530

530-250(capex)=280mo 3360yr /32.5k=10.3%

Raise each side $100

1650-570-350-250=480 480mo 5760yr/ 32.5k 17.7%

Add 3k reno = 16.2% return CoC

Am I missing something? I know it's not a home run but I dont want to play the analysis paralysis game anymore and would like to get some good education rolling.

Thanks for your time!

[Alecia Loveless]

@Joshua Woods With your new numbers I’d do this deal all day long. In fact it’s close to the duplex I’m house hacking right now. I’ve invested closer to $25,000 into my reno but my closing price was $113,000. My side is a 3/3 and my tenant’s is a 3/1. He pays $850 which is under market value but he’s the perfect tenant and moved with me from another location when this property was ready. I will continue to raise his rent to be competitive as his lease renews.

I think this is a great investment for you!