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Updated over 2 years ago on . Most recent reply

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[Repost] Duplex deal analysis

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(Sorry had to repost due to harassment and thread hijacking) 


Original Thread:

Beginner here, looking to start my RE journey. I have a trustworthy contractor that can build me a duplex for $150/sqft. (the land is owned) Assuming I build a $270,000 (1800sqft duplex) I could get $1250 per side. The numbers aren't adding up for me, here's the monthly breakdown:

P/I: $1510 assume @7.5% interest/20% down

10% maint: $250

1mo. vacant/per : $200

insurance: $166 ?

taxes: $157

lawn care: $60 ?

TOTAL = $2343

This results in a whopping 3.3% CoC return and a CAP rate of 7.41% which doesn't even beat my assumed interest of 7.5%. What do you guys think? It doesn't look promising. (please don't suggest that I live in one side, I own my primary outright and have a wife & kid that I'm not moving, however I am open to other development options since I own the land. (4 acres) )

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