First Duplex Analysis

[Josh Day]

I am using a spreadsheet to help run my numbers. My family plans on buying a duplex-quadplex to house hack in Memphis (property taxes and insurance are high here). My assumptions are: 

Asking price $299,500 (Duplex 38104) 

Rent/month $2,350 (both units rented, really $1,200 while we live in one unit). 

Mortgage/month $1,422 

Vacancy 9% rent/month $212/month 

Maintenance and repairs 5% rent/month $10/month

Capex 10% rent/month $20/month

Property management 12% rent/month (for when we move or don't want to self manage) 

Property taxes 2.1% purchase price $524/month (I know you can find the exact numbers, but this spreadsheet is meant to examine other properties and that is the average based on multiple properties). 

Insurance 1.15% purchase price $287/month (I know you can find the exact numbers, but this spreadsheet is meant to examine other properties and that is the average).

Tenant pays utilities 

Cash flow $2,350 (rent) - $2,757 (all expenses) = -$407/month 

What am I missing? Am I overestimating some of these expenses? I know the best way to make the numbers work is to pay less for the property. But in order to cash flow $105/month, I would need to pay $231,000 for the above property and with the market how it is, I do not think that would happen. When I update the spreadsheet for a SFH, I still get negative cash flow. Everyone says Memphis is a buyer's market, but I'm not seeing that based on my numbers.

[Hadar Orkibi]

hey @Josh Day first come to mined is that you are well bellow the 1% rule. with Memphis's high Taxes on MFR this will not cash-flow.

Your property management can be 10%.

vacancy in that area, if in good parts, and the units are modern - you can work with 8%

Same with Capex

Insurance: get your own quote.

Yes, especial in this area it is VERY hot market and most deals don't stuck up. 

It is best if you use the BP Property investment Analyzer to get a full proforma report. im not sure if you have access to it or only Pro and Plus .