St Louis - duplex - deal analysis advice

[Hsiang Lo]

I've never done a deal analysis so bare with me :) I'm looking to buy a duplex in st louis for my first rental property. Details:

227k asking price

4bd, 2br

44k down payment, $1046 per month (includes mortgage, property tax, insurance and mortgage insurance)

2 units and each unit has 2 bedrooms and 1 bathroom, rent per unit is 1100k per month (i think this is the average rent for 2 bd 1 br near st louis university, please correct me if i'm wrong)

NOI: Annual rental income $26,400 (1100*2*12) - Vacancy loss $1320 (28,800*.05) - Operating Expenses $4800 (400*12) - property management fee 2640 (26,400*.1) = 17,640

Cap rate: $17,640 NOI/$227,000 Property Value = 7.7% Cap Rate

Is this feasible or decent? or am i completely off? Any advice would be appreciated :)

[Aaron W.]

@Hsiang Lo Congrats on looking at your first rental property!  

What is your why and what are your goals in investing in real estate?  Are you investing for cash flow or appreciation?  Do you need cash flow now?

Determining whether a deal is bad, good, or great is personal. One person may only see 20% returns as a great deal, but another person may consider anything over 8% as being great.  This is something you have to figure out for yourself. Typically people look at cash flow, cash on cash returns, and cap rates to evaluate a deal. What returns do you need?

Your deal looks like it is cash flowing, so that positive. 

Good luck!