First time multi family duplex buyer

[Michael Carlson]

Hi Biggerpockets community just wanted to check in and see what you guys thought of this deal

490k purchase price duplex in Morris county at 6.5% for 15 years. With my 40% down payment mortgage with property taxes and insurance comes out to $3600 a month.

Current rents are 50% of market value, I'm looking to renovate and bump up to 1800 a unit which is still at least $400 below market value for a 2 bed 1 bath in Morris county.

I strongly believe after replacing the roof, repainting the house, minor landscaping, minor kitchen and bathroom updates I could increase the value of the house to at least 580k. It has modern electrical and copper plumbing. Electrical work was done in the past 10 years, all romex.

I don't feel so confident about this deal since my last deal was 350k purchase price, 100k in renovation and 700k sale price but I need some place to park my money. What are your thoughts?

[Michael Carlson]

Quote from @Jaycee Greene:

@Michael Carlson With those numbers, and using $2,400/unit for rent, I'm coming up with a 7% cap rate on the $580k ARV. This seems to be a VERY good deal for a BRRRR and I think you should be able to find a local lender (bank or credit union) that would finance this with a DSCR loan.

Thats awesome thank you so much for the information.