Deal check for buy and hold duplex

[David Desousa]

Details:

Property is a Duplex in Wisconsin, each unit is a 2 bed 1 bath

Asking price $48K, would be paying cash

Comparable rents in the area in similar duplexes via rentometer and craigslist: $700-800/month

Costs considered:

Rehab @ $15k (probably way off, I'm still learning) - some new flooring, cabinets and doors as far as I can tell currently.

Property tax @ $900/year

Insurance estimated @ $1200 for year

10 percent vacancy rate

10 percent property manager fees

10 percent of rent saved for maintenance

5 percent of rent saved for capital expenditures

3% of price for purchase related costs (inspection/title fees/transfer taxes etc)

Calculations:

Cap rate (purchase price): 18.9%

Cap rate (market value): 13.8%

Cash on Cash Return: 14.4%

Cash flow @ $749 ($375/unit) or $562 after income taxes

ROE: 13.4%

Rent to value: 2.9%

Please punch holes in this for me so I can continue to learn, I appreciate the knowledge here.