Deal Analysis in Charlotte, NC

[Jeshua Patrick]

Need help on a deal analysis. Looking at a duplex in Charlotte. House appears to have been fully renovated. Open house tomorrow. Some numbers such as insurance and repairs are unknown. I will update after I see the property and get final quotes. Total S.F.: 3020 Units: 3 BR/2BA List price: $250k ARV: $250k Estimated repairs: $5k Estimated rent: $1250-$1450 10% Property Mgmt 10% Repairs 10% Capital Ex 10% Vacancy NOI: $2500-$2900 Debt service: $1013 Taxes: $155/mo Insurance: ~$125-$170? Net monthly cash flow: $162-$402 Upfront expenses: Down payment (20%): $50k Closing costs: $5k Repairs: $5k Total: $60k CoC: 3.2% - 8.04% Here’s the twist (and why I’m considering). I want to STR one unit to start. AirDNA says I should be able to average $198/nt at 49% occupancy for a gross of 35k/yr. Also, a similar 3 BR/2BA unit nearby is about 50% booked from Jan 5 - March 31st 2018 and fully booked from April 1st 2018 - January 1st 2019 at 150/nt. 75% occupancy at $150/nt puts gross rent at $41k/yr. Adjusted numbers based on 1 unit LTR at $1400/Mo and 1 unit STR at $2900/Mo as follows: LTR (60% net): Income: $1400 Expenses: $560 Net: $840 STR (50% net): Income: $2900 Expenses: $1450 Net: $1450 Combined net: $2290 Debt Service (PITI): $1338 Additional upfront for furnishing 2nd unit: $10k CoC: $952 for a total CoC ROI of 16.32% NOI: $2290 or 39.25% I fully expect the LTR rent rate to be closer to if not higher than $1400/Mo and repairs/cap ex to be closer to 5% making the deal much better. Also, both units are large enough that I could potentially move into one unit later, sell my current house, and simply rent the second unit saving me about $830/Mo in personal expenses. Thoughts? Anything I missed?