Seeking Advice: Recovering from analysis paralysis ( Working First Deal on a duplex )
Hey guys,
I'm working on my first deal and would appreciate any advice.
I've got good credit currently 793 credit score and a total of about $119,000 in debt. I also have a good annual income between my full time job and other sources of income, however, I don't have access to liquid capital at the moment and need to move fast to make an offer.
I'm looking at doing a hard money / REFI for the purchase and rehab to get them purchased and finished.
The property is a duplex that was foreclosed on after being dried in. A small developer lost the whole subdivision after partially completing it. All the interior framing is in place with rough electrical, HVAC and plumbing. I've had 2 contractors check it out to provide estimates to complete the interiors (still waiting on those numbers but my agent is estimating 30K). There are 2 adjoining units and 1 unit that is attached to a currently occupied unit.
I've had a rental property in the area for the past 11 years and my property manager was saying they can't keep enough rentals, so I don't foresee any problems with keeping it rented.
I believe this deal makes sense as either a flip or a buy and hold but I think I prefer to buy and hold initially. I would like to build up a good base of passive income before beginning to flip properties.
Each Side is:
- 1575 sqft
- 3 bedroom
- 2 bath
- 1 car garage
- Projected rent is $1150.00/mo
Below is the numbers I've put together so far... Does this look right? And more importantly do you agree that the deal makes sense?
Here are the number per unit:
- Vacancy rate: 4%
- Purchase: $35,000
- Repair: $35,000
- Mortgage: $385
- ARV: $120,000
- ROI: 41.67%
- NOI: 8,286
- CAP Rate: 11.84%