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Updated over 9 years ago on . Most recent reply

User Stats

30
Posts
7
Votes
Thomas Brady
  • Corporate Auditor
  • Charlotte, NC
7
Votes |
30
Posts

Should I buy this Duplex??

Thomas Brady
  • Corporate Auditor
  • Charlotte, NC
Posted

Hey Everybody, 

I am a newbie to the real estate world (although I have probably spent 90% of the last month researching real estate investing, mainly on bigger pockets) 

I am very interested in buying a Duplex and I think I found one that meets all the criteria necessary to have positive cash flow, but I really would like to get some advice from someone that has done this before. 

Here are the numbers on it. 

Asking $270,000 (shooting to get it for 250-260k) Numbers below are for $265,000

each unit is 4 bedrooms, 3 bathrooms, and 2,100 square feet.

Current rent is $1,150 for each unit (however it has not been raised since 2011)

I would say the area is a C class area 

Comps in the area are much closer to the $1,300-$1,450 range for 4/3 

My costs would be: 

Mortgage (PITI) $1,750

Maintenance/Vacancy 20% of rent, so around $550 

I would be the landlord, so that eliminates any management fee. 

Tenants currently pay for all utilities

So the total comes out to $2,300 for my monthly costs

I know I can rent the duplex for at least $2,600-2,700 (some comps as high as $3,000 but I am trying to be conservative) 

That leaves me with at least $300 cash flow/ month, and that would be on the low end of my predictions. 

I just want to make sure there aren't any huge expenses I am failing to see that will kill my cash flow, and if you seasoned investors think it is a good buy?

BTW

I talked to a contractor, and for around 15k I could turn each basement into its own separate unit, making it a fourplex. Basement units could rent for $500-600 and upstairs would be around $950-1100. Like I said, I am new to the game so I don't know how I feel about that route, but it would increase my cashflow by at least $300/month while only increasing my mortgage by about $150. 

Anyway just let me know what you think! 

Thanks

Most Popular Reply

User Stats

693
Posts
357
Votes
Vincent Crane
  • Realtor
  • Atlanta, GA
357
Votes |
693
Posts
Vincent Crane
  • Realtor
  • Atlanta, GA
Replied

Honestly dude, this probably won't be profitable. I know you want to jump in but there's not much margin for expenses or error here. and you have to account for property management whether you do manage it or not yourself, that's creative accounting to make a deal look better than it is, and that's not the right way to do it. Just keep looking and find a better deal, find a motivated seller and buy one for 30% off. That's just really not worth the effort, especially for a C class area.

  • Vincent Crane

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