I found this deal located at 2564 Lewis St, Jacksonville, FL 32204, and was wondering whether it was a good deal or not. It's a duplex and he is asking for $89,000, but I feel like I could get it for $85,000. Rents in that area seem to be about $800 for a 1 bed 1 bath, and I pasted my analysis below. I am not sure whether it's a good deal as I could be missing expenses or maybe it's a bad area, but any advice would be helpful. Thanks!
Well the deal seems to work on the BP calc. The only thing I would suggest is reanalyzing your initial rehab budget. (unless this is a turnkey property)
One thing I would add is I would make sure you know the motivation behind the seller selling. Knowing what his motives are, will determine the best tool for the job. (I.e lease option, brrrr, convential financing, seller financing)
Lastly, make multiple offers. If you want the property, and the owner is motivated to sell, you're on the same team. Work with options that synergize and give you both what you want.
Well the deal seems to work on the BP calc. The only thing I would suggest is reanalyzing your initial rehab budget. (unless this is a turnkey property)
One thing I would add is I would make sure you know the motivation behind the seller selling. Knowing what his motives are, will determine the best tool for the job. (I.e lease option, brrrr, convential financing, seller financing)
Lastly, make multiple offers. If you want the property, and the owner is motivated to sell, you're on the same team. Work with options that synergize and give you both what you want.
Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes
7y
The numbers look good.
Rentometer comes up the same rent 800. Elecric was done in 2002 No other permits - roof, ac, plumbing. You should check into the major systems or just plan on upgrading them. looks like they did cosmetic update
I like the area, but it is hit or miss block by block over there.
I found this deal located at 2564 Lewis St, Jacksonville, FL 32204, and was wondering whether it was a good deal or not. It's a duplex and he is asking for $89,000, but I feel like I could get it for $85,000. Rents in that area seem to be about $800 for a 1 bed 1 bath, and I pasted my analysis below. I am not sure whether it's a good deal as I could be missing expenses or maybe it's a bad area, but any advice would be helpful. Thanks!
Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes
7y
That’s a pretty rough area. Anywhere north of i10 in 32204 is. There is money to be made there but it’s tough if you are unwilling to self manage. I didn’t even look at your number but unless it cash flows like mad, be prepared to sink a ton of money into evictions/turnover rehab/ etc. Also, McCoy’s creek floods really bad so make sure the property sits high.
Investor · Georgetown, Tx. · Member since 2019 · 149 posts · 69 votes
7y
I'm not familiar with this area, so I couldn't comment on cash flow. The only thing I would recommend is that you raise your vacancy and repair rate. It looks pretty low, for me at least.
When I analyze multi-family properties, I like to raise the vacancy and Capex/repair rate because I'm dealing with multiple units, some will be vacant, while some will be full at the same time.
In your case, your only allocating about $40 per unit for vacancy, and about $40 for repairs per unit. And if the area is as rough as @Chris Carson said, than I recommend increasing your repairs/Capex and vacancy rate.
(Lastly, don't forget about taxes! You haven't allocated any money for taxes in your calculation, which I strongly recommend.) Try fixing what I suggested and see what you get. It will most likely be a more realistic cash flow and cash-on-cash return.
Lender · Orlando, FL · Member since 2018 · 173 posts · 66 votes
7y
I have heard from many investors that Jacksonville is very hit or miss. Definitely do your due diligence with the area if you continue to look into deals over there. @Lesley Resnick is very knowledgeable of Jacksonville markets, so I am sure she would have some good advice!