First Duplex

[Dave Wigfield]

Hi BP Folks- Looking for opinions on a deal in North Carolina- thumbs up  or thumbs down, would you do this deal.... (?) 

Purchase Price $120,000 need to invest $15k rehab on 2/1, 1/1 Duplex - neighborhood rents max @$850 for comps - was rented at $600/$500 - needs work and is vacant. Nice hardwood, porch close to main street of nice town. I am calculating a fix-up time of 60 days. 1800 square feet total. I want to rent and hold for cash flow.

I have calculated a NOI of $10,400 (rent less paint, tax, ins) assuming 2 months vacancy and $700 rent per side(maybe I can get more). Taking out debt service on $135,000 (conventional 30 yr fix 25% down) I end up at $212 positive cashflow per month.

Does it hunt? Would welcome thoughts....and thank you, Dave.

[Dave Wigfield]

Hi All - Thanks so much for the info so far ! Here is more info as requested:

Property is located 45 outside of Charlotte in a bedroom community.

I am not using a 203K rehab loan - what is that? I won't live in the property.

I have a conventional 30 year fixed 25% down at 4.75% interest. I have not checked with the bank on the rehab costs- that's a gotcha too I guess?  I would use cash value loans for life insurance for the down payment.

Each unit has utility separate so I would not pass to tenants.

In the NOI - I assumed 10% of monthly rent for maintenance, and estimated taxes and insurance. I did not factor property management.

Thanks again!