Interesting Duplex deal in Kingston

[Bo Taylor]

Hey BP,

Looking at an interesting Duplex deal in Kingston and wanted to hear what you guys thought.

Property:

- Address: 123 Russel Street

- Duplex with 2 above grade units

- Both units are 2 bed 1 bath

- 25 min walk to Queens U

- 15 min walk to groceries, entertainment on princess

Financials:

- Asking Price: $279,900

- Revenue:

- Potential Rent: $1100 per unit ($26,400 annualized)

Operating Expenses:

- R&M: $200 per month

- Prop. Management: $162 (8% of monthly rent)

- Insurance: $125 per month

- Prop Taxes: $250 per month

- CapEx Reserves: $83 per month

- Mortgage: Assuming 20% DP ~$872 monthly payment

Risk and Return Metrics:

DSCR: Minimum of 1.4x in year 1

Debt Yield: Minimum of 7.05% in year 1

Levered IRR: 12.63%

Levered Equity Multiple: 2.82x

Levered CoC: Year 1 - 4.48% Year 10 - 8.56%

Levered Cashflow in Year 1: $3,404

Levered Cashflow in Year 10: $6,502

Potential Asset Management Strategies:

- Finish lower basement to convert to triplex and add add and additional 2 bed 1 bath unit

- Renovate current units to raise rents by 20%-25%

- Manage property personally to decrease OpEx

I don’t currently have the funds to go after this deal so I thought I would throw it out here and get your opinions on it. Do you think this is a good deal? Would you go after it if it were in a market you usually invest in?