Philadelphia Area Duplex Scenario

[Steve Close]

Hey BP, I am a new member from the Philadelphia area. I am in the process of evaluating the multi family market around the Delaware County area, specifically Drexel Hill, Upper Darby, Glenolden, and Ridley. My goal is to start off with a duplex for around 130k, I plan on putting 20% down, and ideally would want a brick exterior and units that need no more than $2,000 in initial improvements. If I can get the down payment, closing costs, and initial improvements below 35K, I would want between a 15 and 20 percent cash on cash return. So I wanted to ask some of the more experienced investors on BP if they think I could even find a property like this?

I realize I will have to evaluate a lot of properties, I don’t see anything on the market that fits what I want right now, but I did go back to look at previously sold properties to see if what I want is realistic.

Below is a property that seems to fit, and using the 50% rule I think I can get a cash on cash return within my range.

http://www.zillow.com/homedetails/1033-Lawnton-Ter-Glenolden-PA-19036/9334754_zpid/?fromHomePage=true

I see that a few months after this property was sold, a unit was listed at $1,100 a month.

https://hotpads.com/1033-lawnton-ter-glenolden-pa-19036-vee29f/b/pad

Assuming that both units rent for $1,100, and using the 50% rule, this property should cash flow around $520 a month, for an annual cash flow of $6,240, and assuming an all in amount of 35K, that would be a cash on cash return of 17.8%.

So should I be optimistic that a duplex like this, priced around 130k, with 20% down and all in under 35k will be around in the next 6 months, or am I missing something? Given the high property taxes is the 50% rule unrealistic? I don’t plan on using a property manager, but might want one in the future. I would appreciate any feedback or insight on this.