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Updated over 3 years ago,

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15
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7
Votes

Is this the right way to look at a deal?

Elisa Sacchetti
Posted

I am new at analyzing properties whether they would be a good or bad investment. I used up all my free trials on the Bigger Pocket calculator, so I found a spreadsheet on Bigger Pockets to help me analyze a deal. This duplex was already contracted, but I wanted to evaluate it as if I would buy it.

Duplex 6 bed 4 bath in Athens GA near UGA (idea to rent it out to college students)

Purchase price $189,900, Est. Rent is $834/month (not sure if this is per unit or overall for the mortgage) Property tax $140/month, Insurance $52/month, 30 year loan at a 2.95% interest rate if I lived in one of the bedrooms and rented out the other 5 bedrooms. I was thinking of charging $500 per bedroom *5 = $2,500 rent per month.

I was calculating 20% down payment, 5% vacancy, 0.83% property tax, 1.5% Closing costs, 10% maintenance and repairs, 10% CapEx, and I assumed $150 a month for utilities (not sure how to calculate this). What else did I forget for expenses?

All the nearby homes are selling or worth $250k. The inside would need a lot of fixing and cleaning, so I estimated $15k (might be too little or low I don't know I didn't see the inside), but the outside is good. 


The spreadsheet I used estimated $708 monthly cash flow with a CoC return of 13.54% and total ROI of 19.19%. I feel like this is too good to be true, so I feel like I forgot to factor something important. Please help out if possible!

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