[Calc Review] Too good to be true? Cleveland, MFH.

[Albert L.]

Hey folks, usually when I get these kind of numbers, it's too good to be true.

I'm a bit newer to the Cleveland area so I may be off on the expense and repair numbers. This listing has also been on the market for over a month which is also a flag but may also be why it's at such a low purchasing price for a 5BR, 2BA MFH..

Other hesitations with my estimates are my rental price, I may need to lean more conservatively but I did look around craigslist and it seemed like this was in line with other MFH in this area. Also a bit hesitant on the after repair value since that's a bit broad as well.

Could you kindly take a look at the report?

Would be happy to return the favor if there's a deal you're looking at as well.

Thanks everyone! 

View report

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

[Abi Wegman]

Are you going to be living in one side? If not, you'll need 25% down and interest rates are probably closer to 5.75% or even 6% for investment properties.

I'd bump your vacancy up a bit. If you expect your unit to be empty 6% of the year, which is about 3 weeks, you'll need to consider that your PM will keep the first month's rent on a new lease. That's the one area I'm not super fond of on the BP calculators. So your expense will be 6% of rent that you don't collect + 1 month of rent that your PM keeps (8.3% of annual rent). Basically, if you have 1 turnover per year and it takes you less than a month to fill the vacancy, you lose 2 months of rent. So I'd just double your estimate to 10% or 12%. 

Finally, you're missing your utilities and insurance. In Cleveland, owners pay water/sewer bills. From what I've been reading, for a duplex you're probably looking at $75-150/mo. I've read that you can put in a clause that says that any amount over $75 will get billed back, but you can only do that if you have separate water meters. Looking at it now, you say this is actually in Painesville, which is in Lake County (Cleveland is in Cuyahoga). I'm not sure if tenants generally pay water in Painesville.

I think insurance on a duplex is going to run you $800-1500/year, so factor in an additional $80/mo for good measure.

How does it look now?