Duplex Deal - Good by the Numbers or by Property Value?

[Joe Henry]

I'm looking at a duplex. 82k is the lowest the seller will go. The numbers make sense. The only thing I'm concerned with is that the property may not be worth 82k if you weren't looking at numbers - probably more around 65 - 76k (I'm still learning the market and RE in general, this is my first deal, so, it's hard to tell).

The property sold for ~115k during the 2006 high, and ~56k around '10. Beginning of '05 it was priced a few thousand above the 82k it's at now.

Here is a google spreadsheet with the numbers: https://docs.google.com/spreadsheets/d/1HIaLPDByQFzW8w-3Joa_sGPtOkbM1ghVIN387GBr-ZU/edit?usp=sharing

So as an investor, with a buy and hold strategy on this, would you buy knowing what the numbers are? What would be your reasoning for walking on this deal or closing?

Any other advice welcome.

Thanks

[Robert G.]

a) You're doing 5% for repairs.  I recommend more, particularly for a duplex.  2 kitchens, more bathrooms, more things that need fixing (and often rougher tenants).

b) I don't see CapEx. Sooner or later, you'll need a new roof. And new AC (2 of them, actually). You need to account for these things. That is another 10%, IMO.

You're doing 25% for repairs, vacancy, and management. I think, including CapEx, you need to be at round 37%.

c) That $190 monthly HOA is a deal killer. Eating up half your profits.

When you run the numbers again, with all this considered, I think you'll see it's a pass (for me, at least).