Finding the working number on a property

[Alex Stromberg]

Hey Everyone!

I recently came across a property that I would like to purchase as my first property but I am having trouble finding the "working number" (aka the number that makes the property a positive purchase). I am new to REI and I think I ran my numbers too conservatively, so I am asking 1: if someone else could run the numbers using better estimates than what I used or tell me if the numbers I used were good? 2: How much effort is too much effort when trying to make the numbers work? 3: what is included in the P&I

Details of property below:

Duplex

Listed Price: 195,000

Price I would like to offer: 160,000

ARV: ~195,000

Assumed closing cost: 2500

Estimates repairs: 6000 (kitchen is very out of date and so are the bathrooms)

Taxes: 4,071

No down payment

4.625% loan interest

Amortized 30 years

Should be able to rent at: $835-$875 per side after renovations

Vacancy: 5%

Repairs: 5%

CapEx: 7%

Insurance: $100

Lawn Maintenance: $80

Tenants pay water and electric

Expense increase over time: 1%

Income increase over time: 1%

Property Value increase over time: 2%

Management fees: 10-12%

Sale fees 9%

Bonus Details:

Each side has a single car garage

Rent estimates came from apartments in the area with similar number bed/bath

Would be running property as a house hack that would transition to full rental property in about 2 - 3 years

Any advice and help is appreciated! Thanks in advance!