Buying our First Duplex! Is this a good deal? Long term hold

[Kollin Buchholz]

Hi all, this is our first home purchase and it will be an investment in a duplex - long term hold for retirement income. We will live in one side for the first 2 years. I am looking at the numbers and cant tell if the ROI is good or not. Location is very good. We will do an 80/20 mortgage for 30 years fixed.

Purchase Price: $417,000.00

Min. Rental area Comps: $1,600.00/unit per month (some as high as 1800)

Repairs: none needed to rent one side (windows must be replaced soon)

As I see the numbers:

Income: $3,200 (potential)

Expenses: $1,163.00 (Vacancy, Taxes, Insurance, Maint etc.)

Mortgage: $1,690.00 (plus/minus $50 since we haven't locked rates yet)

We appreciate everyone's help and advice - we are very excited, but the ROI seems low for an investment, however, this will act as an entry into RE investment and allow us a place to live and collect some rental income simultaneously.

Inspection window closes next Sunday - so we are trying to get our ducks in a row before that to make an informed decision!

KB/CC

[Taylor Howe]

I ran your numbers, and it looks to me like your cash on cash return comes out to about 2%. If you. If you wanted to get that COC up to 10% you would need to get the duplex for about $310,000 (all other inputs equal).

Just a thought!