Minneapolis HouseHack Analysis

[AJ Smith]

2909 13th Ave S, MPLS 55407

Number of Units: Duplex (U/D)

MLS# 5429792

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Property Listing Price = $229,900

Sqft: 1632

Rehab Price/SqFt = $0 (move in ready)

Total Rehab Estimate = $0

Total Cost (Purchase + Rehab) = $229,900

Minimum Down Payment Required for Purchase (5%) = 11,495.00

Loan Amount (Total - 5% Down Payment) = $218,405

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Estimated Monthly Payment (PITI +PMI) = $1535.44

Fixed Landlord Expenses (Electric, Water, Sewer, Garbage, Shoveling/Lawn) = $300

Reserves (15% of full occupancy rent) = $360

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TOTAL Est. Monthly OpEx (PITI + PMI + Fixed + Reserves) = $2195.44

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Estimated Monthly Rent (while househacking) = $1800

Est. Cashflow (while househacking) = $(395.44)

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Estimated Monthly Rent (full occupancy) = $2400

*************Est. Cashflow (full occupancy) = $204.56***********

*************CoCROI = 21%****************

Beats my $100 per door cash flow rule.

Would love to hear y'alls thoughts.

Also feel free to go after it/analyze it yourself if you are interested! Can't pursue it myself so I am here to spread the love <3

[Evan Kraljic]

Hey AJ,

Your analysis looks pretty good, a few things I would mention though for the expenses. 

I'd agree with Tim that the 15% expenses may be little low. I'd probably go with 20% for vacancy, maintenance, and capex combined, possibly more depending on the area and condition of property. I searched that property and it has had some updates recently so I think 20% is solid. I've also heard people use $200/door/month for maintenance/capex alone and then vacancy as a % of the monthly rent. In this case the numbers would work out similarly for the fully rented income at $2400.

Your fixed landlord expenses are actually probably higher than needed. I would assume tenants pay for gas and electric in their units and landlord covers the water, sewer and garbage. This gets billed monthly and has been around $150/month for my duplex in South Mpls. I've heard it's higher in St. Paul but 150 could be used as an estimate for any Mpls duplex. Snow removal and lawn care can be written into the lease to be the tenants responsibility. I would recommend this if you aren't owner occupying. So that would boost your cash flow by $150 and counteract the $120 loss for 5% higher expenses, close to a wash.

Last thing, although this property looks to be relatively turnkey, I'd always budget for some repairs up front, maybe 1-2k. I believe the fees for rental license change of ownership in Mpls are $450 alone + maybe another 70-100 per unit, per year. And then there are little things you can do to make the property more attractive, repainting where needed, LED lights or a few new fixtures here and there, etc. A little bit can go a decent ways in that regard