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Updated almost 7 years ago on . Most recent reply

How do you find house hacks that make sense?
Where I'm located, a duplex in a decent area is going to run you at least $125k. Fully rented, rents in said decent area might be $1500-$1600/month. Taxes in Cleveland are generally high, with some areas being downright absurd. Assumptions include 10% for property management, 5% vacancy, 5% for repairs, 10% for capex, $75 for insurance and $100 for utilities. Considering those numbers along with a monthly mortgage payment of $620 (on a $125k property), I'm yet to find a deal that positively cash flows, and I've looked at a lot. I know the market is tight nowadays, but how is anyone finding deals? Are my assumptions bad?
Apologies for the rant - I'm new at this, but it's getting frustrating analyzing over 50 properties and not one positively cash flows (and some people want over $100/door....?).
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Originally posted by @Griffin Myers:
Where I'm located, a duplex in a decent area is going to run you at least $125k. Fully rented, rents in said decent area might be $1500-$1600/month. Taxes in Cleveland are generally high, with some areas being downright absurd. Assumptions include 10% for property management, 5% vacancy, 5% for repairs, 10% for capex, $75 for insurance and $100 for utilities. Considering those numbers along with a monthly mortgage payment of $620 (on a $125k property), I'm yet to find a deal that positively cash flows, and I've looked at a lot. I know the market is tight nowadays, but how is anyone finding deals? Are my assumptions bad?
Apologies for the rant - I'm new at this, but it's getting frustrating analyzing over 50 properties and not one positively cash flows (and some people want over $100/door....?).
Using your figures you are expecting to spend $57,600 over the next 30 years on a duplex. That is not something you'll be doing. Look at it pragmatically.
- A roof on a typical Cleveland duplex will run you about $6,000. A Roof will last 30 years.
- A Hot water tank is gonna be about $1,000. You have two in the property & they last close to 15 years so that's $4,000 over the next 30 years.
- Furnaces last 20+ years so over the next 30 years let's say you replace each one. That's about $6,000.
That's your major big ticket items that will need replacement. Total cost over 30 years $16,000.
After looking at it this way do you really think you'll need to spend an additional $41,600 in other capital improvements?