Duplex Analysis (House Hack/Investment)

[Nick Aquiningoc]

First, I want to thank you all for your time and assistance! I've just started analyzing deals within my market and would love to get some extra eyes to check if I'm on the right track. The goal is to use my VA loan for the mortgage. Thank you again!

Property Info

Purchase Price: $160,000. The property is actually listed for $189,900 but after looking at comps, most properties are selling for around $140,000 to $150,000. Would I be able to negotiate even lower?

Property Type: Duplex

Year Built: 1972

Lot Size: 1590 sq ft

Unit Size: 1590 / 2 = 795 sq ft

Rehab Costs: $20,000 + 15% (overrun cost) = $23,000. This figure is a *very* rough estimate due to this being my first investment/rehab. Essentially, one side of the duplex has been completely renovated but listing didn't speculate on the other side so I'm assuming I'll need to redo all the cosmetic work.

After Repair Value: $200,000. This is also a rough/conservative estimate. Seeing as how the purchase price is 160,000 plus another 20,000, I'll just figure the appraisal would at least be $200,000 (I think)

Property Tax: $2,143/yr

Insurance: $798/yr

Property Management: 0$ (self manage)

Maintenance: 10%

CapEx: 10%. Listing mentioned the renovated unit got a new HVAC but i figured I'd be conservative on this as well.

Utilities: $0. Tenants are paying utilities.

Purchase cost: 3%

Vacancy: 5%

Total Operating Expenses: $405

House Hack Analysis

Gross Rent: 850 (/mo)

NOI: $355/unit (in this case only 1 unit since I would be living on the other)

Cash flow: -$326. So this means that I'd be paying approx. $326 every month for this property? It's still a lot lower than my current rent that I'm paying but I probably could find a better deal (I'd still be stoked to only pay $326 a month for my living expenses down from around $1,600).

ROI: 18%

CoC: -14.1%

Summary: Is the goal to essentially break even while house hacking? If so, this might not be a good deal.

Fully Rented Analysis

Gross Rent: $1,700 (/mo)

NOI: $515/unit or $1,030 total monthly

Cash flow: $250 (post tax)

ROI: 45.5%

CoC: 13.4%

Summary: Fully rented, this looks really good!