Is this a deal you would invest in?

[Jimmy Hung]

Hi BP,

I’m looking for my first real estate deal and found one out of state in Middletown Ohio. It’s a duplex that’s zoned as a single family. Here’s the stats:

Purchase: 120k

Rent $1590

Utilities paid to tenants

Fully rennovated (new roof, electric, hvac)

Insurance: $1100

Property tax: $2400

After all repairs, vacancy, capex, I would have a cash flow ~$500/month with a CoC of around 24%

I’m able to get a lender to lend on this property for 25% down and my insurance agent is fine insuring it as a duplex.

Only thing is if the appraisal comes low, then I'd have to pay the difference, but the comps for a SFH are in the similar range. I plan to buy and hold, so I'm not too concern with the difficulty in selling it.

I tried reaching out to the city to get it rezoned but was denied.

Is this a deal you would do? If not, why?

[Tina Tsysh]

I agree with @Corey Hawkinson and definitely recommend doing your due diligence regarding the property's zoning. If the city decides that you can't operate the property as a duplex anymore, no matter how good your returns are, they can be gone instantly. The last thing you want to do is to be stuck in a property that is a total disaster and where you have no cash flow coming in. I am curious as to why it can't be rezoned.