All Forum Posts by: Michael Mixon

I'm using the "Multiunit/Cap Rate" method to determine the price on a duplex. Stated annual income is $9,600. Using the 50% rule, I'm expecting expenses to be approximately $4,800, giving me a $4,800 annual NOI. At a 8% cap rate I'm coming up with an offer price of $64,000, not taking in to account any repairs. A loan with 10% down, 7.5% interest at 30 years, gives me an annual payment of $4,833, and an annual cash flow of $927. I know Brandon likes to get $100 per unit, but on a property with this low an income, I'm thinking as long as I'm getting 10% cash flow, I'm doing alright. But $64,000 for a duplex sounds really low, did I miss something calculating the offer price?

Thanks,

Mike