Found 2 Properties I really like but need help with the #'s!

[Quandra Adams]

I am trying to run the numbers on an owner occupied duplex that needs a few things before it's livable for me. I am almost sure that I put the numbers in wrong a few times because I got 2 totally different outcomes. One was had a negative cashflow! I am so nervous as this will be my first time buying real estate and really just need someone who's not as emotional about this as I am to help me run the numbers. I think the problem comes in when I try to guess the ARV and repair costs. Looking for a someone who is can help with this sooner rather than later.

[Naftali Tolibas]

Quandra,

1) I'd analyze as if you were renting both sides out, and see what the cash flow is from there. It's good to have an exit and know that you're going to cash flow. 

2) I'd look at market rents, the way I do this is look at properties that are similar. Put yourself in a renters shoes, would you rent the place at that price? Is it a super-deal, as in cheap compared to the others out there? If it is, what price would justify the rent so that it'd still be a deal, but the 'right' price. The key is to think as if you're the renter, or the ideal tenant you'd want to attract.

3) If you're planning on holding long term, I wouldn't worry about the ARV at the moment, HOWEVER, it is good to know if you plan to re-finance or sell. It gives you options. Finding the ARV would be done by looking at other comparable properties, and seeing what they sold at. Read Jay Scott's pdf for finding ARV, its free and you'll be golden:

https://www.biggerpockets.com/files/user/jasonscot...

4) We also haven't discussed this, and it probably should've been #1, but LOCATION. Is this in a good location? Cash flow is King, but in the wrong location, it could cause lots of headaches. We're under the assumption that the location is good, but something to consider if not. 

Overall, you've made the offer, but you can still back out. You're definitely not under the water, and assuming that you have an inspection clause, there are ways to back out. I know how you feel, I'm trying to close on my first duplex, so I had real cold feet. But I'm passed that, am confident in the numbers, and excited to start my RE journey. 

Hope this helps!!