Duplex in Muhlenberg Area of PA - Need Analysis

[Tim Porsche]

Hi All!

I have a duplex I'm looking at in the Muhlenberg area of PA. It's in a decent neighborhood, but the schools aren't great. Listed below are the numbers. Could you please let me know what you think? Would love to get some opinions before agreeing to purchase this.

Purchase Price: $89,000

Purchase Costs (with 10% down): $11,000

Estimate Repair\Upgrade Costs: $25,000

Total Cash Investment: $36,000

Unit 1 Estimated Monthly Income: $950

Unit 2 Estimated Monthly Income: $525

Unit 3 (storage) Estimate Monthly Income: $100

Total Monthly Income: $1,575

20% of rent for repairs\capex\vacancy: $315

Net Monthly Income: $1,260

Monthly PITI: $710

Net Monthly Income after expenses and PITI: $550

Yearly Total Income $6,600

Total Cash Investment: $36,000

Cash-on-Cash Return from cashflow alone: 18.3%

Please note that at the price points for rent, after the upgrades I'll do, I'm not planning on including any utilities or lawn care with the rent, so that would be the tenants' responsibility, in case you're wondering why I didn't factor that into the analysis. 

Any advice would be greatly appreciated. Let me know what you think please...yay or nay :)

[John Leavelle]

Howdy @Tim Porsche

Just for clarification.  What kind of financing are you using where you only need 10% down payment? What type of units are they (1/1, 2/1, 3/2)?  Are the rents listed the current rent or your expected rent after Rehab?  Are units currently occupied?  If occupied, what are lease terms?

Understand you will self manage.  However, it is still advisable to include PM in your Cash Flow analysis.  You never know if you may need or want to use a PM service in the future.

Even with these questions it looks like a good deal to me based on what you have provided.