Help Finding Out If This Corpus Christi, Tx Duplex Is A Good Deal

[Alison Emmert]

Need some help figuring out if this is a good deal because I'm not familiar with the Corpus Christi Market.

I came across a duplex in the Corpus Christi, Tx area. It's located near highway 286 & 37. Each unit has 2bed/1bath and approx. 720sqft (1456sqft total) there are some cosmetic repairs, but nothing major that I can see. Owner states being able to rent $650 each and asking $70k. Owner owns property free and clear.

Would this be considered a good deal?

[John Leavelle]

Howdy @Alison Emmert

What type of deal are you looking for? Wholesale?  Flip?  Buy and Hold?  I am assuming you want Buy and Hold. We need additional information to give a reasonable response.

What are comps for the area?  You need to know if the asking price is within the market range.  You do not want to over pay.  Also, find out the Rental Market rates for the area.  Is $650 what he is currently receiving for rent? 

What type Financing would you be using?  Terms and Mortgage payment?

Next we need the Pro forma Cash Flow analysis.  What are the known expenses?  What is the Vacancy rate?

Here is a quick ruff analysis:

Purchase price:  $70,000

20% Down payment:  $14,000

Loan Amount:  $56,000

4% APR/30 years

P & I:  $267

Monthly income:  $1,300

Expenses (50% Rule:  $650

NOI: $650

Cash Flow:  $650 - $267 = $383 month ($191.50 per unit)

Based on a lot of assumptions this may be a good deal.  However, I strongly would advise you to be very diligent and complete a thorough investigation to confirm all the facts.  Use a Realtor to get comps and rental market data.  Try to get actual documents from the Seller.

If you make an offer and put the property under contract be sure to include appropriate contingency clauses.

Hope this helps.  :)