Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 6 years ago on . Most recent reply

User Stats

28
Posts
7
Votes
Geoffrey Tanudjaja
  • Detroit, MI
7
Votes |
28
Posts

Duplex in Detroit [Calc Review] Help me analyze this deal

Geoffrey Tanudjaja
  • Detroit, MI
Posted

View report

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

Hi BP Community!

I am currently planning my first house hack in the Detroit area. May I ask all of your opinions on this deal?

The listing price is $90k. I was thinking of using FHA loan, so, I only need to put 3.5% down. But, I read through a couple of blog posts that if I want to use FHA loan, there is an insurance premium that I need to pay upfront (I assume 1.5% from the total Loan Value). I also assume my PMI to be $100 and my insurance to be $120. I also assume total rehab to be $3000, thinking that I might need to buy dishwasher, refrigerator, washing and dryer machine for both units (one for myself and one for the rental unit).

The rental rate for the other unit is assumed to be $1000/month. However, based on the analysis, I produce negative cashflow for this property. In order for it to be positive cashflow, the price should go down to around $78k assuming the rental rate is still the same.

I know that if I put 20% down and rent both units, this property will actually give me a pretty good cash flow.

Is it normal to have a negative cash flow (at least for the 1st year) with FHA loan? Or should I modify my assumption or calculation?

What are all your thoughts about this? Thank you again for all the help BP!

Cheers,

Most Popular Reply

User Stats

384
Posts
149
Votes
Jabari Long
  • Real Estate Broker
  • Detroit, MI
149
Votes |
384
Posts
Jabari Long
  • Real Estate Broker
  • Detroit, MI
Replied

@Geoffrey Tanudjaja it is very normal to have negative cash flow with a 2 unit if you're occupying one unit.  I suggest underwriting the deal based off of both units being occupied at current market rates.  If the property cash flows and the return is near 10% I say you are looking at a decent deal.

Loading replies...