Should I buy this duplex?

[David Perkins]

I found a 2/1 duplex near my house for sale for $169,000. I think I could get it for maybe $160k. It’s been totally redone. New roof, flooring, cabinets, everything because there was a fire a year or two ago. It is currently leased out through April of 2020 pulling in $1,725 a month. $875 and $850. Taxes are $2,027 and insurance would be around $1,000. Owner pays for water and yard maintenance ($150 a month combined for both). I have enough for 15-20% down and would be getting a loan from a family member at a rate of 2.33%. This would be my first multi-family house. Is this a good deal??

[Brad L.]

PITI looks like $920.25 based on your numbers above, definitely warrants a further look depending on amortization/term of the loan from your family member.

Add in 25% for vacancy, maintenance, capex and $150/mo for water/landscaping and that puts your monthly cost around $1,501.50 with $111.75 cash flow per unit. Even though it's "totally redone" I'd personally still account for maintenance and capex, but would be more forgiving on the low monthly cash flow per unit since those expenses may be relatively unlikely.

Additionally, I don't get inspections when I purchase, but since there was a fire I'd definitely get an inspection to ensure things were actually corrected and they didn't just slap lipstick on a pig.