Duplex in Dallas

[Chuck Culpepper]

I've been following the MLS and see several duplex deals in far east Dallas (south of I30 and west of I635). They've been selling at 10% cap rates. It's not a very nice area so there likely won't be much appreciation but it looks like they cash flow pretty well. I'm focusing in this area because it's seems to be a happy medium of affordability and not a complete dump.

Does anybody have Duplex advice in the Dallas Fort Worth Metroplex or specifically the area I'm looking in? Looking to make my first investment and would love a successful one.

Thanks

Chuck

[David Veeder]

I have a couple duplexes.  My criteria is 1,000 per side and $850 rent per side minimum.  The lower $$ you go the more you can make good money but there more drama that you will need to deal with. 

I am not familiar with the neighborhoods in south east Dallas other than there are some pretty tuff areas down there. 

I may have found the duplex that you are talking about or simalar one.

16,800 annual income
  1,350 in expenses  (NOT LIKLEY)  property tax is close to 3% in most parts of dallas

143,000 X 3% = $ 4,290,  replacement value insurance probably closer to 1,000 and there will be repairs, vacancy and cap x, that I have not accounted for no less management and renovation.

16,800 - 5,290 = 11,510 / 140,000 = 8.2 % Cap 
income-expense= NOI / price = Cap Rate

Not a bad cap rate although I did not include all of the expenses. 

Manangement: 1,680
Vacancy 1 unit for 1 month per year: 4%
repair 5%:  $ 900 
Capital Expense fund ($300 -$350 per door per year) : $ 600

The NOI rate doesn't include financing.

I would run the deal through the bigger pockets calculator with some of these expenses and a mortgage if you need one.