All Forum Posts by: Don Le
Don Le has started 1 posts and replied 3 times.
Post: First timer and Deal Sounds Too Good to be True
- Posts 3
- Votes 1
Quote from @Jules Aton:
I’m also sorry to hear about your wife, hope she has a positive outcome and admire your perseverance. I’m not especially active now, only bought 2 properties and sold 3 in past 5 years on east coast but unless in a great neighborhood that is almost guaranteed to increase significantly in value or I was going to live in one side even in consideration of tax advantages I would not invest $75,000 for $230 month especially with the work and liability that will be involved in owning a duplex even with a property manager.
Post: First timer and Deal Sounds Too Good to be True
- Posts 3
- Votes 1
That's a great idea I didn't think about that, thanks!
Post: First timer and Deal Sounds Too Good to be True
- Posts 3
- Votes 1
Hi there all! I am a very first time investor and am looking at a particular property in OH. Got into this game because at the very young age of 35, my wife got diagnosed with Stage 4 lung cancer. Long story short, I realized I needed to change something. It killed me that now she is forced to go back to work even though she still is not feeling well. Anyway you're not here for a sob story but I wanted to ask for some help for my first time. My main issue with this property is that it is been bought and sold 5 times in the past 5 years. People don't hold it it for any longer than a year. It's in a very small town and I verified that the average rents are correct. My big question is that other than getting a good inspector out there, what am I missing?
Purchase Price: $280,000
Down Payment: $75,000 (~27%)
Loan: 6.625% interest, 30-year fixed
Rents: $1,350 per side ($2,700 total, tenants pay utilities)
Property Taxes (2023): $4,247/year
Insurance: $2,600/year
Property Management: 10% of gross rent
Maintenance + CapEx: 10% of gross rent (includes reserve for roof replacement in 5 years)
Vacancy: 5%
Annual Gross Rent: $32,400
Total Operating Expenses: ≈ $13,600
Net Operating Income (NOI): ≈ $18,800
Cap Rate: ≈ 6.7%
Annual Debt Service: ≈ $16,000
Cash Flow (after all expenses): ≈ $2,800/year ($230/month)
Debt Service Coverage Ratio (DSCR): ≈ 1.17
Cash-on-Cash Return (Year 1): ≈ 3.7%
Notes:
- Roof expected to need replacement within 5 years (budgeted $10–12K).
- Tenants pay all utilities,
- Rents appear market average.
- Located in a stable B-class neighborhood with consistent rental demand.
- Population growth slightly negative but a 20 minute drive from Cincinnati.