Possible First Multi-family deal (duplex)

[Matthew Bennett]

I've been passively researching RE investments for a couple years and in 2017 wanted to take the leap. I've only been listening to BP for only about a week now, and this site, forum and podcast is the best resource out there. Just want to say thank you in advance!! I have a potential duplex deal (buy and hold) I'm looking at and the numbers are checking out for me: - Long-term tenants (have been there for a couple years) - Purchase price: $59k - Down payment: 20% - Cash outlay: $14,980 - total rent / month is $1,100 - Total Expenses: $417 - Cap Rate: 21.21% - COC Return: 60.1% What are you all thoughts on this as a first deal? I think this is something I could sink my teeth into and start some momentum to financial freedom! Let me know if you need to know more info to give some better advice / if I'm analyzing this wrong. Thanks!

[Kevin Siedlecki]

@Matthew Bennett - 60% COC ROI is a red flag. Nothing really does that well, and if it did, an experience investor would have snatched it up before anyone else heard about it. So we need to tease out the numbers a little. What have you included in your expenses? Are you sure the tenants are actually paying? What class of neighborhood is it?

I'm also not getting the same results you are for COC ROI or Cap Rate. If the $417 includes your mortgage, then I can only calculate COC, and I'm getting 54.7% - which is still unreasonably high. If it does not include the mortgage, then I can only calculate cap, and I'm getting 13.9%. So something does not add up here.

Post again with your expenses broken down by category so we can look more closely at this.