Would you do this deal??

[Matt Perez]

Hi BP community 

I’m a newbie investor so thought I would ask this awesome community their opinion. As expected right now deals are tough. My question today is would you do this deal.

It’s not one of the homerun/grand slam deals I hear all about in podcasts but who knows. For an average Joe like me trying to get started maybe this isn’t bad. So figured I’d ask all of you. 

Duplex house - 2 units both 2/1 (good condition)

Estimated sale price $310k

Quoted payment 

7.5% (25% down)

• $2068.96/month (assuming $150/mo for insurance and $293/mo for taxes)
• $87,149 cash to close

Annual cash on cash return 3.6%
cashflow $252 monthly

Both units currently occupied and lease signed through April 2024

I will be using property management for this property because it’s out of state for me. 10% fee. 

This is an A+ grade neighborhood. Very high rated for great places to live and top 10 in this state to live.  Appreciation should be good in this location. 

If there is more info you need let me know. I am on the fence with it and seeing what our BP community would do. 

Thanks 

Matt

[Matthew Crivelli]

@Matt Perez

If the plan is to hold the property long-term as an appreciation play then I would say yes. This isn't a winner as far as cashflow goes, one major repair would wipe out your COC returns for the next 5 years.