Hi-
I'm looking for duplexes, starting small...
What I'm running across are for sale owned by investors that have several duplexes.
So, to hone my skills, I decided to "play at the notion of buying" to use what I learned about deal analysis, thanks BP community, to see what I come up with.
Today, I ran across a listing from an investor (selling through a realtor) who owns 4 duplexes all on the same street. I pulled up the addresses using maps.google.com and saw the area and have actually driven through this part of town before (though I don't remember too many details since it's been a while). From the pictures, it looks decent, it's on a cul-de-sac. I also pulled up the property records (appraisers and tax site) and found the investor purchased all the units at the same time in 1996 (built in 1978) for the same price each $40k. I didn't bother with looking to see if the investor still has a mortgage on the units, since that $ amount and this amount of time it's likely to be paid for. And according to Trulia.com, the area is all green (good) as it relates to their crime stats.
These are all 2/2 total 1708sq ft (854 @).
What I'm wondering is the listing shows that it has been on and off the market since 2009. I got this from realtor.com.
Price History
| Date | Event | Price | Price/Sq.Ft. | Change | Source |
|---|
| 01/09/2013 | Listed | $565,000 | $331 | — | Tallahassee |
| 12/31/2012 | Delisted | — | — | — | Tallahassee |
| 07/02/2012 | Relisted | $565,000 | $83 | — | Tallahassee |
| 06/29/2012 | Delisted | — | — | — | Tallahassee |
| 01/03/2012 | Relisted | $565,000 | $83 | — | Tallahassee |
| 01/01/2012 | Delisted | — | — | — | Tallahassee |
| 08/02/2011 | Relisted | $565,000 | $83 | — | Tallahassee |
| 07/31/2011 | Delisted | — | — | — | Tallahassee |
| 07/08/2011 | Relisted | $565,000 | $83 | — | Tallahassee |
| 06/30/2011 | Delisted | — | — | — | Tallahassee |
| 06/28/2011 | Price Changed | $565,000 | $83 | -8.13% | Tallahassee |
| 12/01/2010 | Relisted | $615,000 | $90 | — | Tallahassee |
| 11/30/2010 | Delisted | — | — | — | Tallahassee |
| 10/11/2010 | Relisted | $615,000 | $90 | — | Tallahassee |
| 10/08/2010 | Delisted | — | — | — | Tallahassee |
| 09/09/2010 | Relisted | $615,000 | $90 | — | Tallahassee |
| 09/08/2010 | Delisted | — | — | — | Tallahassee |
| 06/27/2010 | Price Changed | $615,000 | $90 | -0.81% | Tallahassee |
| 04/09/2009 | Listed | $620,000 | $91 | — | Tallahassee |
What can I take away from the above listed/delisted history? Does anyone look at these to add to their analysis?
When I did the analysis, plugging in all the rents, 10% PM, 10% vacancy, taxes (I did $2000 per yr per unit. i don't know how to determine this since their taxes will differ from what the new person coming in will have to pay), insurance (rough estimate of $1k per yr per unit), 10% maintenance, 20% down with 4.8% rate on a 30yr.
It didn't cash flow well at all.
- Unit 2 Rent: 575
- Unit 3 Rent: 550
- Unit 4 Rent: 575
- Unit 1 Rent: 575
I know this is just pro-forma (am I saying this correctly and using it correctly?) as it was provided by the investor/realtor as part of the ad and due diligence would be to see what other rents in the area go for and to get an actual "rent roll" from the seller.
On the subject of analysis, do I look to the duplexes as "individual" Cash Flow, Cash-on-Cash, and ROI for calculations? Meaning, instead of 10% vacancy like I do for SFR, it would be 40% because it's 4 units.
When I was doing this for a single duplex, I included both for the rents, accounted for capEx, maintenance, 10% (played with 20%) vacancy, included the insurance and taxes. It just seems that when dealing with so many units, there might be different rules.
Thanks and have a great day/evening!
