Help with deal analysis-duplex near Rome GA

[Robert E Bogino]

Hey guys I,m running numbers on my first deal and would like to make sure I;m not missing something.

Duplex is actually located in Lindale GA. Both 1 bedroom, 2 levels. Owner says its has been remolded with new wiring, AC and heat, paint, and kitchens.  No mention of roof. Its says both sides are currently renting for $550 each. I think I can get it between 70-75k.

Pros- numbers all seem to look good and be above the %1 rule of thumb.

Cons- Looking around the area there is not a whole lot of rent data on the immediate area. Some comparable places are higher, some are lower. The 550 seems a little high to me.  Property manager says it seems right. I'm also concerned with finding tenatnts in a more rural area and quality of tenants.

On to the numbers

Taxes and insurance- 149

Vacancy -110 (I estimate %10)

Repairs and Cap ex- 200

Property Managment-66 (will be 6% since realtor and management are same)

Mortgage- 304

1100-826x12=3288 annual cash flow

Cash on cash return

Down payment-15000

closing cost-1500

rehab budget 10000 (It says its renovated, but I want to be safe and budget this in)

Total investment 26500

3288/26500x100=12.40%

Anyone have any thoughts on the area?

[Jeff Kehl]

@Robert E Bogino I own 170 rental units in Floyd county and can fill you in. I'm guessing that's the rehabbed mill house in Lindale you're looking at? A few years ago you could buy those for $10-20k not rehabbed. So by buying it you will be setting a new high price for the area. Check out comps of other mill houses in the area and you'll see what I mean. That area does not have the best reputation but it's not terrible either.

Make sure you do a really good inspection because it's such an old property. You want to make sure they did a quality job on the rehab. I can give you a couple of good inspectors if you want.

Is the water split? Did they put in decent hvac?

As far a rents go I'd say that is high for the area but rents are going up rapidly here. Comparable 1 brs I'm at $400-425, 2br/1ba $450-$525, 2br/2ba $595-$625. Vacancy is very low in the area and rents in towns closer to I75 are considerably higher.

Which property manager are you using? I can give you my Property manager contact and another that will give you better information than me if you want a second opinion.

PM me if you want some contacts to talk to.