Analyzing a duplex for the first time

[Rick Jenkins]

My wife & I are still very new to real estate investing but have informed our agent to look for small multi family opportunities. He has sent us a duplex that just came on the market. It states that it is currently rented with a waiting list. What information do we need to ask for so we can properly analyze the deal?

[Chris Davidson]

@Rick Jenkins you need to know the lease terms,  You have to honor the lease in place so if they jsut signed a year lease below market rent you will be stuck until its renewal time. Also what are market rents and vacancy rates for the area.

What kind of expense are there common water line means you pay water and sewer, what are taxes, PM fees, etc...

Find out the age of the systems (roof, HVAC, Plumbing, Windows, Hot water heater) this will help you determine capex budget. If you have a new systems you don't need as much upfront, if the systems are at end of life you need to adjust your budget accordingly. 

You will also need to figure out financing as this will determine acquisition cost and holding cost.

Add up all the money going out and take it away from the money coming in and now you know how it will perform.

Like @Alex Fenske mentioned there is a BP calculator tool to help with this. Analysis this one and a few more deals to get a feel for what you should expect and figure out what works for you.

Best of luck!