Guidance on Duplex Purchase

[Josh Mayfield]

I'm in Spokane, WA and like many other markets, single and multi-family property prices are high. I purchased a duplex last year that was priced about $20k less than similar properties ($385,000). I admit that I was eager to get into the market here and jumped the gun on this one. At current market prices, I don’t see how it’s possible to get properties to flow positive as rental rates haven’t kept up. I’m not able to get it to cash flow positive and in fact, anticipate needing to feed it an average of $2200/yr. for the next 5 years. Probably would need a new roof in the next 3 years.

Wondering if I should cut losses and sell it; should be able to sell for $395k. Since purchasing this property, I’ve advanced my education via Deeper Pockets and understanding of the local market. Will continue to pursue markets outside my immediate area as well as looking for off-market buy opportunities. Would appreciate any feedback. I’ve included some numbers below

Purchase Price: $ 385,000

Amount Financed: $ 288,750

Down Payment and Purchase Costs: $ 106,000

Gross Rent: $ 2,342

Operating Expenses: $ 949

Net Operating Income: $ 1,393

Loan Payments: $ 1,754

Cash Flow: -$ 361