Analyze This Duplex

[Mark S.]

DEAL ANALYSISDuplex - 2 BR/ 2 BA units. Built 1999. Each unit about 600 sq ft. Each unit also has partially finished basement (dry wall is up, needs paint, etc.), offering a huge amount of storage space. Also thinking might be able to add an additional BR here (one of the rooms in basement has window and area with door that could be a closet (although it has pipes running through it, so hopefully no leaks!).

Purchase Price (ideally): $46,000

INCOME: $1,000/mo ($500/unit)

EXPENSES
Vacancy Loss (@8% or 1mo/yr): $80/mo
Cap-Ex (@10%): $100/mo
Prop Mgmt (@10%): $100/mo
Ongoing Repairs (@10%): $100/mo
Prop Taxes: $60/mo
Insurance (guesstimate, will get quote soon): $75/mo
TOTAL EXPENSES: $515

FINANCING: 20% down, 30 year fixed, 4.70% interest rate.
Principal & Interest: $190/mo

INCOME - EXPENSES - FINANCING = MONTHLY CASHFLOW = $295/mo. Might be slightly off due to rounding.

REHAB/REPAIR COSTS (to get rent-ready)
These numbers can be wildly off. I have no clue how much stuff costs and am by no means a rehabber or anything close. Both units need work; here are the larger items:

Appliances (Unit A needs range + fridge; Unit B needs fridge): $1,500
Floors (flooring needed in living area, hallway, bedrooms - probably use vinyl): $3,000
Windows (need to be re-sealed) + New Doors (front screen door, doors in basement to yard, etc.): $1,500
Paint (most rooms need paint): $1,000
Roof Shingles: (may or may not need to do; roof missing a few shingles near gutter): $300
Dryer Duct (missing a piece that connects from laundry room to outside, quick fix): $100
Hot Water Heaters (electric) x 2: $2,000 (which is probably way high, but trying to be conservative).
TOTAL ESTIMATED REHAB BUDGET (which is probably sky-high): $9,400
ESTIMATED CLOSING COSTS: $5,000 all-in
PROJECTED CASH-ON-CASH RETURNS: 14.91%