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Updated almost 10 years ago on . Most recent reply

User Stats

36
Posts
8
Votes
Joshua Frahm
  • Flipper/Rehabber
  • Raleigh, NC
8
Votes |
36
Posts

Potential first property. Live in Duplex financed FHA. Thoughts?

Joshua Frahm
  • Flipper/Rehabber
  • Raleigh, NC
Posted

Potential first investment property

Duplex: Both large 2 bed, 2 Bath, each has a garage, large yard, in single family neighborhood, separately metered, laundry in each, needs very minimal work, pretty much turnkey.

$340K - Potential purchase price

$11,900 - FHA down payment 3.5%

$2,432 - Monthly Mortgage (Includes: PMI, RE Taxes, Insurance)

$29,178 - Annual Financing

$3,500 - Monthly Rent (both units if I was not living in one)

$42,000 - Annual Rent

Operating Costs:

$3,264 - 8% Vacancy Rate

$4,080 - Management 10%

$2,040 - Maintenance 5%

$2,000 - Utilities Water and Septic

$11,384 - Total Operating Expenses

Annual Cash Flow: $1,162 (Note: Once I refinance the property in the future and get rid of the PMI of $228/month it will increase cash flow to $3,900)

Cap Rate: 8.92%

CoC first couple years with PMI: 6.51%

Budgeting for management costs but I will be managing the property myself for at least the first couple years.

Thoughts?

Most Popular Reply

User Stats

64
Posts
10
Votes
Brandon Barnic
  • Flipper/Rehabber
  • Horseheads, NY
10
Votes |
64
Posts
Brandon Barnic
  • Flipper/Rehabber
  • Horseheads, NY
Replied

I looked into doing the same thing. If possible in your area get a 3-4 unit. You'll get more cashflow while living there.

another option is if you only find duplexes you could rent a room in your half.

3rd thing is to rent garage separately to max income. 

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