Am I Analyzing Deals Correctly?

[Benjamin Sulka]

Fellow investors, 

I have a deal analysis question. 

My plan is to house hack and I'm having trouble getting numbers to  cash flow AFTER I move out. It's almost impossible to get a property to cash flow while you live there but I'm also having trouble seeing cashflow after my departure. 

Market rent in my area for duplexes is about $1,300. My plan is to go 5% conventional financing. 

Here is an example: 

Home Type: Duplex

Purchase Price: $200,000 (in my area, this would be purchasing a property at a pretty decent discount. My plan is to walk for dollars and call potential distressed landlords)

Loan Amount: $190,000

Loan Details: 7% interest rate amortized over 30 years 

INCOME

Rent: $2,600 (assuming both units rent for $1,300) 

Total Income: $2,600

EXPENSES

Monthly P&I: $1,264

PMI: $158 (1% of loan amount)

Homeowners insurance: $100 (estimate for my area) 

Vacancy:  $130 (5% of rent) 

Capex: $260 (5% of rent)

Taxes:  $450 (monthly estimate for my area) 

Total Expenses: $2,362 

Total Income - Total Expenses = $2,600 - $2,362 = $238 

This is excluding future property management, potential lawn care, snowcare, utilities that I'd have to pay etc.

There are some properties that rent for upwards of $1,400 in my area but all have extra features like central air. It's highly unlikely that I could purchase a property with central air at a significant enough discount to make the numbers work.

Would love to hear your thoughts. 

[Matthew Irish-Jones]

Quote from @Bob Stevens:

Quote from @Greg Scott:

Quote from @Bob Stevens:

 The roof on an avg duplex in Cleveland will be 6- 8k, not anywhere near 20k, 

$6K is not a believable number for a re-roof of a duplex unless you are severely cutting corners.

 100% not, there about 20- 25 sqt, (maybe you are assuming its 50- 60  sq ?) at 280-300 per sqt .If there is sheathing that needs replacing sure a bit more, but not anywhere near 20k. That would be 700+ per sq. That would be the highest price anywhere in America, I am not speculating I have done 100s.  It's about 130- 150 per sq to buy it so how can they charge 500 in labor for ONE DAY work, that's insane. 

All the best  

 Standard tear off roof replacement cost in Buffalo NY is $20,000-$25,000 depending on pitch, gutters, carpentry work, etc..

I have had one as low as $16,000 for a unit with a roof that was not very high up, no carpentry work, and tons of room between neighbors.