Buting new duplex in Dallas, NC.
I'm under contract for a duplex in Dallas, NC, and I'm a little nervous. They asked 419k, I'm under contract for 365k with a 3.5% seller concession and a 1.5% commission (I'm a new agent). Rental market says 1200 to 2k's, section 8 gives me very different prices from 900 to 1200. I'm looking for advice. How do I know this is a good deal? That I'm on the right path?
Most Popular Reply
I would definitely try to firm up your rental numbers. A quick and easy way to do this is through Zillow, mls (Closed), realtor, etc.
You can also run some high level numbers like this
Income - $1500+$1000 = $2500X12 = $30,000
Operating expenses = 25% of $30k... ($7500)
NOI = $22,500
You may set your investment criteria to a 7 or 8 cap (Return if paid cash) depending on the market.
Say you are looking for a 7 cap, $22,500/7%= $321k
I would also focus on cash on cash return. I can help further if you want to shoot me a PM.
Best of Luck!