Help Me Analyze a Deal

[Andrew Merritt]

Hey All, looking to purchase my first investment property. I'm in the Charleston, SC area and am trying to decide between a SFR or a duplex. Here are the numbers:

Duplex

Purchase Price: 180k

Rent: estimated at 1k/side, 2k total

Monthly cash flow: 300 w/ property management, 500 w/o (I'm planning on managing myself)

Pros: good cash flow, recently updated, good location job-wise

Cons: cigarette smoke (one side is significant), both HVAC units are about 25 years old, house is located very close to major road (noisy), some roof/ceiling damage near vents

SFR

Purchase Price: 180k

Rent: 1600 (probably high end of what I could get)

Monthly cash flow: 16 w/ PM, 175 w/o

Pros: completely move-in ready, recently updated, good location, great neighborhood, likely higher appreciation

Cons: not great cash flow

My calculations are based on: 25% down payment (I'm actually planning on paying w/ cash do close sooner then do delayed financing to free up more money for investing.  Expecting 30 year mortgage at 4.75%), 300/month in taxes, 100/month insurance, 10% for vacancy, 10% for combined repairs/capex, and 10% for PM.  

As I said above, I'm planning on doing my own PM for these properties (which I have no experience w/ but I've got to figure it out anyways).  

The numbers say that the duplex is the better deal, but I feel like the SFR is safer. Any guidance would be greatly appreciated on my first deal.

[Brad E.]

@Andrew Merritt

Is your strategy buy and hold?  If so I would probably go with the duplex.

The cigarette some you can get rid of, and if you are holding for a long term you are going to need to replace the HVAC at some point on any property. I'd just make sure I was capturing that in CapEx.

It also depends on what 'safer' means to you.

I'm new to this too, but those are my thoughts.