New Construction Duplex

[Jason Luongo]

I have come across a developer that is building a couple duplexs for investors. I have done a very conservative analysis using the lower end for rent and higher end for expected expenses. Please take a look at the finances below and let me know what you think. Again, this would require zero repairs as it is new construction. I would say the neighborhood is a c+ - B minus type of area. Its directly across from an elementary school. Not sure if thats a positive or negative being so close.

[Mike Wood]

@Jason Luongo  Dont count on zero repairs just be cause its new construction.  Sure the larger items are trouble free, but there is still stuff that breaks (I have built four new construction duplexes in the last 4 years).

Some of your expenses are high (like repairs) and other are low (like taxes, insurance, etc) assuming the house is in Florida. Your expenses also assume all utilities are paid by the tenants (may not be the case) and you dont have anything for things like lawn care, etc (this may be your misc expenses).

I would not be wild about a new construction that that rents for less than 1%.  I am also assuming that the purchase price is the finished value, or close to it.