My First Deal (Buy and Hold Duplex)

[Jake Hartnett]

Hello everyone,

I would like your help analyzing this deal. I don't see anything close to 2% deals around here, so I'm just looking for something better than 1%. I work full time so I'm not looking for a fixer-upper, just a nice place that cash flows and doesn't suck too much time.

This deal is a solid duplex built in the 70s (most places around here were built in the 1880s.

Asking $139,000 (but its been on the market for a few months)

$1700/month rent (1.22% of asking price)

tax $2700

insurance $1400

Maint.CapX (10%) $2040

Management (10%) $2040

Vacancy (10%) $2040

NOI $10,180

20% down at 4.5% interest for 30 years is $563/month $6756/yr

Cashflow $3424/year ($285/month) so $142 per unit

I also expect over $2000 in tax benefit.

That's a profit of $5424/$30,000 down for a 18% return on investment including the tax benefit.

There is very little inventory in town for rentals, so I expect a much lower vacancy rate.

Roof is newer, water heaters new, furnace new. Kitchen/Bathrooms can use updates someday, but are very usable.

Any feedback is appreciated.

Thanks.

Jake