Low Income Area Duplex Advice & Analysis

[Kevin Olano]

Hello everyone, I'm seeking the wisdom and experience of all of you out there on my first deal. I would love your evaluation of the property's numbers but also my mindset going into this. I have been looking at multifamily properties in lower income neighborhoods north of LSU (Baton Rouge, La) This is mainly due to the fact that it's the only area I can afford but also for cashflow. While you know nothing about me is this the wrong place to start? Should I just save up and shoot for a great location? Am I being to hasty and blinded by my desires to invest? And now that you have seen deep into my thinking the numbers... Duplex, 4 bedroom 2 bathroom 1100 sqf Cinder block walls A/c wall units Listed at $50k would shoot for a 15-25k price. It sold in 2014 for 37500 and looked a lot better then. But let's say $30k Would do a renovation loan for $43k at 6.5% (80% of price, 23k+ 15k rehab cost) assuming financing comes through Rehab cost $15000 Purchase cost 3% Tax $500 Insurance $500 Maintenance 12% -$1872 Cap ex 10%- $1560 Vacancy 10% - $1560 Gross rent $1300* 12 15,600 So what is your take on this property? Does any of the numbers look way off or throw up red flags ? Thanks for your time.