Can you please review my deal?

[Evan Anderson]

I have a duplex under contract in the University Place, WA for $600k. Both units are 3 bed 2 bath at approximately 1.1k SF each with attached garages. Both have leases for $1,895/mo. I just applied for a loan which I expect to lock in an interest rate around 4.7% at 75% LTV. The basis compared to comps is favorable. I also think there's potential to push rents $200 with renovations. Roof was replaced 6 years ago and one of the units recently had all flooring replaced. I have real estate experience but this is my first multifamily deal so any thoughts or advice is appreciated! Keep in mind PNW pricing is tough out here. Also this would be a long term hold.

More information: I'm putting down $150k (25%) and the loan is $450k (75%). I'm self managing.

Y1 Budget as follows:

Rent: $45,600 (based on current leases)

R&M: $3,000

Landscaping: $1,000 (I live nearby and can do much of this)

Insurance: $1,400 (estimate)

Taxes: $8,286 (after reassessment)

Other expenses: $885 (buffer)

NOI: $31,002

Debt Service: $28,006

Cash Flow: $2,995

This is before any renovations or rent growth. I believe rent could be below market.