Duplex Deal Analysis - I'm still trying!

[Paul Nagy]

Hello everyone and a big thanks to all the pros who have repeatedly posted and are giving me recommendations/advice. It is appreciated!

I'm looking at a duplex in a good, upper middle class suburb of Kansas City. It is a 2bd, 1bth, 1 car garage, partially finished basement, side-by-side duplex that needs nothing and both units are currently rented at $750 each per month. It was built in 1986. Tenants pay all utilities.The asking price is $135,000 and I will pay no more than $125,000. The property is in a great school district and on a street and area with mostly duplexes.

I am pre-approved with 20% down at 3.85% for 30 years. Insurance would be $100 per month and taxes are $2,200 per year.

Gracias!

[Steve Babiak]

The income and expense side of things seems to leave you with some positive cash flow. So, the missing part for this is comparables. Since this is 2 units, the value will usually be determined by recent comparable sales by any lender / appraiser - so you need to look at those to see how much equity spread you have. Keep in mind that if you had to sell shortly after buying, due to some life event occurring, then you might have to pay closing costs to sell - ideally you would have some spread from your purchase so that you don't have to come up with money out-of-pocket if and when the time comes to sell.