Is this a good buy & hold duplex deal in Houston area?
I've recently met a great agent via BP and I am looking for a duplex to 4-plex to start as my first buy & hold deal in Houston. Just wanted to see if any of you thinks the deals below are worth considering? I believe ‘5907 Allison Rd' has the best potential out of the 3.
Below are the 3 deals I looked at and based on my cash flow calculation, '12135 Troulon Dr' unit would be a better deal than ‘5907 Allison Rd’ but from an investor's point of view, should I consider other points?
Here are my thoughts, even though all 3 properties are currently all rented out, the neighborhood looks the best for ‘5907 Allison Rd.' Also, it's built in 2007 rather than in the 70's. None of the 3 quires HOA fee so that's a plus. Also, even though ‘5907 Allison Rd' unit is closer to several industrial sites, it's still ‘cleaner' than the other 2 units. The other 2 units have couple of houses on the same block that are boarded up, liquor bottles in the front yard and graffiti painted on the front of the house. That's not a good sign, is it?
‘5907 Allison Rd’ unit is one of the small patch of 6 or so the same type of duplexes in that area and it’s right in front of a private horse ranch. It looks like all units in that area are currently occupied but you can smell the animals when you are in that area. Is that still considered as a negative point?
1of the 3 units is currently on a month to month lease rather than a yearly lease. That potentially can lead to a higher vacancy rate so should that be considered as a negative sign?
My general questions for you:
1)For a duplex priced at 200k or less, what things would you consider besides ‘cash flow?' Does school district matter? Does HOA matter?
2)The rent prices are listed for these 3 units on MLS. Are these numbers trust worthy?
below is the cash flow analysis we did:
| Expenses | |||||||||||||||||
| Address | Investor Feel | MLS | Area | ROI | Cost | Down Payment (20%) | Cashflow | expected income | repairs/maint ($40) | Prop Mgmt (12%) | Insurance ($50) | Advertising | Utilities (w/ tenanets) | Vacancy (13%) | mortgage (30y) | HOA | Property Taxes |
| 5907 Allison Rd, duplex, renov 2, same tenant | good location, tenants, rent increase possible | 13105989 | Houston, TX | 10.28% | $198,000.00 | $39,600.00 | $339.33 | $2,000.00 | $40.00 | $240.00 | $50.00 | $0.00 | $0.00 | $260.00 | $779.00 | $0.00 | $291.67 |
| 12135 Troulon Dr | not good school district | 41893845 | Houston, TX | 21.59% | $100,000.00 | $20,000.00 | $359.75 | $1,325.00 | $40.00 | $159.00 | $50.00 | $0.00 | $0.00 | $172.25 | $394.00 | $0.00 | $150.00 |
| 8125 beech cove ln | not good school district | 95983401 | Houston, TX | 18.42% | $105,000.00 | $21,000.00 | $322.33 | $1,600.00 | $40.00 | $192.00 | $50.00 | $0.00 | $0.00 | $416.00 | $413.00 | $0.00 | $166.67 |