First Duplex

[Gildardo M.]

Hello, everyone! My wife and I are going to check out a duplex around our local area in hopes to purchase it as our first property. 

It's our first dip into real estate, and it sounds too easy. I know there's a lot more behind it that involves a lot of acronyms and hours of work, but I definitely don't want to work my entire life.

This is the math I've come up with and I'm sure it's not super accurate.

Payment for the house at $137,900: $800

Renting out one side: $600

Housing Allowance in my area: $897

Left to pay: $200                                  

Banking: $697

Why does it sound so easy?

I understand it's not always a guarantee that I will have a tenant, but right now, the house already has a tenant.

The way I justify being able to manage not having a tenant for a while is because for a whole year, I went comfortably throwing my money to renting a house. With the profit I'll be making from renting out half of the house, I can save it for emergency vacancies and any problems that come up with the house, and this is on top of the money I save from my regular paycheck.

[Bob Mastroianni]

@Gildardo M. Congrats on taking the first steps into investing. Based on the info that you posted there seem to be a few things that you left out. Are you planning to live in one unit & rent out the other or are you looking to rent out both units? If you're looking to rent out 1 unit & live in the other, you will take different things into consideration compared to renting both units out for profit.

If you're renting both units out for profit, make sure you include a repairs/maintainance expense & a reserve amount for capital expenditures. You're numbers seem pretty tight, so you don't want to have one repair expense run you into negative numbers. Also, it's best to find out what the vacany rate is in your area. If you go one month without a tenant that you need to know how much that is going to cost you. 

If it seems too easy, it might not be a great deal. 

Good luck. There are some great article's on BP that break down the best way to analyze multi's.