Need help analyzing duplex - Will be my first offer

[Brandon Holtzinger]

I don't know what all info is needed but I will list as much as I know.

1682 square feet. 841 per side. Built in 1977. Each is 2 bed and 1 bath. Property looks to be in good condition. Owner moved across county and does not want to manage rental property out of state. Property is located close to town in a good neighborhood. Walking distance from high school in one direction and hospital in another.

Asking price is $125,000

Currently rented for $750 per side. 5 years for one tenant and 1.5 years for the other.

Taxes were $1950 last year.

All utilities metered separately and paid by the tenants.

After entering all info into J. Scotts spreadsheet using $120,000 purchase price. 20% down ($24,000)
Financed for 20 years with a 5% interest rate (both are total guesses)

Using a property manager the numbers came out to $3,017 annual cash flow
8.16% Cash ROI
15.91% Total ROI

Any help would be appreciated.

[Jesse Waters]

Props for asking for help on your first deal.  I kind of skipped that step.  Try looking at it with a 30 year mortgage if you can get it.  That should drop your monthly payment down by a good bit.  Also, shop around and see what you can get for management.  Even if you plan on self managing make sure to count for it.  If something comes up and you have to put a manager in place, you don't want to be shocked by their cost.  Generally 10% is a good starting point, then add some for placement fee's.

In my recent experience I have had the banks asking for 25% or 30% down. This is more out of pocket, but more cash flow each month leaving ROI about the same.

Make sure to give it a good solid look-over before you buy & get a good inspection.

This duplex sounds very similar to one that I am looking at in my local area.  Best of luck, would like to see how this one works out for you.