Check my homework on this?

[Christopher Hilsenbeck]

3000sqft SF Bay Area (Marin County) duplex for sale. 

Unit 1: 2br/1ba 

Unit 2: 4br/3ba 

ADU: 1br/1ba, kitchenette

Is this insane? In order to make this cash flow, I will live in the ADU and:

STR Unit 1 (comps are 60-80k/yr)

STR Unit 2 as both "entire house" and 4 separate "private rooms" with shared kitchen.

Entire house comps: 87k/yr

Private room comps: 40k/yr/room

STR comps for all units is roughly $15000, which will cash flow $5k/mo

LTR comps for all units is ~$12900, which will cash flow $3k/mo

[Darius Ogloza]

A few questions/comments:

How did you calculate $12,900 gross revenue as a LTR on this property?  This seems high to me.

The exemption in the ADU law for renting non-owner-occupied properties expires in 3 years or thereabouts. You should figure on losing rental income from the ADU in year 3 or 4.

How did you calculate market value at $1.5 and purchase price at $1.3?  If the property needs work and thus can be purchased at a discount to market value then you need to account for the cost of this work in your calculations.

Your property tax should be closer to $1,400/month on purchase price of $1.3M per my calculation.  How did you calculate $1,900/mo.  

Is the owner responsible for all utilities (PG&E & water)?  You should check past bills.  Depending on the property $1,000/month could be substantially off.

Why a 3% annual increase in property taxes?  Where di you get that?