Question about 9/11/14 webinar

[Barry Smith]

Brandon:

I found a link to this webinar and watched it on demand (9-11-14).  Anyway, I have a question on your deal analysis of the duplex.

Why are you factoring in garbage and water or any utilities.  In Southern California, the tenant is paying for ALL utilities (at least mine are).  Is that not customary in your area?

If you add the $100 for water, $45 for garbage, and manage it yourself to save $134.20, then this Duplex is cash flowing $300.08 per month.

After it is fixed up with your $10,000 in repairs, you can probably raise the rents slightly as well, while adding washer and dryers to get further increase cash flow. 

The Duplex is only $60,000... how can you lose on that cash flow? 

If you have $6,000 down, $10,000 invested in repairs and are making $3600 a year, you have everything you put into it back in 4.4 years.  So, you end up with another cash flowing asset in your portfolio that you no longer have any money into. 

It's also possibly an asset you could trade... to upgrade into a better property.

Isn't $20.88 being awfully conservative in analysis of this duplex?

Just playing devil's advocate... what do you think?

Barry Smith