60% annual return ?! What's the catch ?

[Tony Camorra]

Hey guys!

I'm so glad to be part of this community, really helpfull!

Very first thing, I'm french so my english will not be perfect and I'm sorry for that, but will do my best hehe

I'm an real estate investor (cash buyer) in Europe & Asia and I'm now interested by the USA's market so I'm trying to learn as much as possible.

If I'm writing this post, this is because I need to understand better one thing.I see many properties (here or anywhere else) with amazing annual return like 30% 40% 50% or 60%, so my question is : where is the catch ? Of course there is one, if not it would be so easy!

Here is an example:

"Asking Price: $20,000.
Current rent from both units: $1,050
Similar units rent in the area: $1,400
Rehab – Needs a new roof.
Total: 2 units, 4bed/2 bath, 1,320 SqFt.

Amazing INSTANT income! This well-maintained Duplex is centrally located
in a great location for an income-producing property. It doesn't need
much besides a new roof and some cosmetics.

Enjoy being a landlord with great returns on your investment and start to collect rent from day 1.
Very easy to rent year-round to long-term tenants.

Features:

* 2 separate electric meters ( Tenants pay electric)
* Landlord avg' water & sewer - $68 + $75.

Unit A: 2bed/1bath, 660 Heated SqFt, currently rented for only $500 to the same long term tenants.
Unit B: 2bed/1bath, 660 Heated SqFt, currently rented for only $550 to the same long term tenants."

Ok so this duplex has an gross annual return of 1050*12*100/20000 = 63% ? What the hell ?!

Even if I have -50% for fees etc. the net annual return could be 30%, still pretty high!

I'm aware about class D and I guess this is one obvisouly. But looks like there is long term tenants so thats means, without rehab and without searching for news tenants, we get big cash flow from the first day, so my question again is: where is the catch ?

Let's say we get a new roof + some cosmetics as announced. Let's say 10k (I absoluty don't know what could be the cost so maybe I'm wrong) and 40% of charges, we could still have 600*12*100/30000 = 24% ?

I'm just trying to understand, since as an European investor such annual return are quiet impossible in our countries.

Thanks a lot guys!