[Calc review] Deal or no Deal?!

[Riley Breck]

Current property I am looking and would like to get some outside perspective if it's a good deal or not. It's a duplex in Key West, FL , one unit is a 3/3 and the second is a 1/1. The current list price is 649k; build in 1969 and was remodeled recently. My current plan is to live in the 1/1 and use a 0% down VA loan and a untaxed 2.3k/month housing allowance and rent out the rest of the rooms. I would do this for 3 years until I leave and attempt to remotely manage the property with the help of a PM.

Rent Estimates - 1 Bed (2.1k) 2 Bed (2.8k) Both Conservative Averages as of 4/2020

Here is the Calc: https://www.biggerpockets.com/...

[Jaysen Medhurst]

@Riley Breck, can you link to the pdf "report" of your analysis? I can't see the break down of your expenses. Also, how are you getting to a monthly income number of $5960?

This may be a good "house hack" while you live there. You'll build equity and get land lording experience. The thing is you're really betting on appreciation, which is inherently dangerous. Let's assume no appreciation in 3 years, to be safe. The small amount of equity you've built up will easily get eaten up by transaction costs, if you sell.

As a pure rental, especially with 100% leverage, this property will likely not cash flow. You're no where near the 1% rule. After Vacancy, Management, Repairs, CapEx, and P&I, I show you with ~$280/month. Then you need to pay taxes, insurance, water/sewer, lawn care, admin/professional fees, and other house utilities/trash (if applicable). Does this property require flood insurance? You will absolutely be in the red each month.