[Calc Review] Help me analyze this deal

[Luke Pierce]

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*This link comes directly from our calculators, based on information input by the member who posted.

I am in the process of looking for a second property, and am currently exploring some ideas in small multifamily properties.  Just doing a little deal analysis practice for multifamily units, and would love y’alls thoughts.

6-BR, 2-Bath, 2100 square foot duplex in an area of Nashville that is beginning to experience a higher volume of development.  The property needs A LOT of TLC, detailed out below.

Purchase Price: $129,000.00
Renovations: $63,120
Monthly Rents: $1350.00 per unit, tenant also pays electric, sewer/water

I could certainly use some practice in estimating repair costs, so here are my assumptions for repairs that will be required based on the photos available on MLS. I would love you all to critique these as well.

I’m not in the least bit handy, and assume that I will need a contractor for all of these—no sweat equity in this deal.

- Sheetrock to repair some holes in the wall ($800)

- Some decent new flooring (2100 square feet of wood laminate flooring installed, $5.50 per square foot = $11,500 total)

- Appliances — washer, dryer, refrigerator, stove, dishwasher, water heaters, and microwave for each unit ($11,900 total)

- Washer and Dryer ($1500 per unit, $3,000 total)

- Refrigerator ($1300 per unit, $2,600 total)

- Stove ($750 per unit, $1,500 total)

- Dishwasher ($500 per unit, $1,000 total)

- Water Heat ($1000 per unit, $2,000 total)

- Microwave ($300 per unit, $600 total)

- New kitchen cabinets and counter tops in both units ($4000 per unit, $8,000 total)

- Framing of closet space for washer dryer plus shelves and door ($2,000 per unit, $4,000 total)

- Bathroom remodel in both units ($9,900 total)

- 2-sink cabinet / vanity ($800 per unit, $1,600 total)

- 2 sinks ($400 per unit, $800 total)

- Countertops ($400 per unit, $800 total)

- Mirrors / Medicine Cabinets ($500 per unit, $1,000 total)

- Framing and installation of small linens closet plus door ($800 per unit, $1,600 total)

- New toilets ($200 per unit, $400 total)

- New tubs ($1200 per unit, $2400 total)

- Lighting and Fixtures ($650 per unit, $1300 total)

- Exterior landscaping, some patching of the yard, trimming of trees, and a few beds out front ($2,000)

- New interior doors ($900 per unit, $1,800 total)

- New exterior doors ($800 per door, $1,600 total)

- New mailboxes and house numbers ($500 per unit, $1,000 total)

- Exterior painting (minimal with brick construction) ($1,000 total)

- Interior patining ($3,000 per unit, $6,000 total)

- New exterior shutters ($300 per unit, $600 total)

- Interior window treatments ($300 per window, $3,000 total)

On the rent side, there are few rents in the area at $1250. I think I can push this up to $1350. I would absolutely engage a property manager.  Assuming larger capex and maintenance costs.

I have access to hard money cash for a purchase and renovation of the property—about $196k of an outlay.  If I can get the home appraised at $240k+, I would be able to finance the repayment of hard money principal, and have a property cash flowing.

How is my thinking on this deal?