All Forum Posts by: Adrian Au

Hello!

I am planning to invest into a real estate with a business partner. We have identified a duplex in Philadelphia. We plan to purchase this property and rehab this property with cash, and obtain a cash-out refi. This would be my first property deal, my business partner already has multiple homes. My primary goal is to own enough cash-flow properties that can eventually replace my income. 

Acquisition cost: $220k

Rehab cost: $65k

ARV: $325k

Total monthly rental income from both units: $2500.

After financing, we would cash flow $400 per month, after vacancy, delinquency, cap-ex, taxes. 

The cash-on-cash return is only around 8%. However, the ROI after cash-out would be around 45%, which includes an assumed property appreciation at 4%, and tax benefits.

The Gross Rent Multiplier is around 9.5.

Is this a good deal? What else should I look for? There are not of multi-family inventory in the are looking at. Any thoughts, tips, concerns would be appreciated, thank you!

Adrian A.