I've a beautiful duplex in Cleveland, Oh that needs no more than $10K worth of work, and that's clearly an overestimation!
I am selling it for $25K and after the work is completed
the numbers will look like this:
Two hot water tanks (1 for each unit) - $800 x 2 = $1,600
One new Furnace - $1,200
New electrical - $1,100
Two new bath tubs (1 for each unit) - $1,200 x 2 = $2,400
Two new toilets (1 for each unit) - $500 x 2 = $1,000
Two new sinks (1 for each unit) $350 x 2 = $700
Two new stoves (1 for each unit) $500 x 2 = $1,000
Two new refrigerators (1 for each unit) $600 x 2 = $1,200
New carpet for each unit - $3,000 x 2 = $6,000
New paint for each unit - $2,000 x 2 = $4,000
Tile for kitchen floor each unit - $500 x 2 = $1,000
Total Estimated rehab costs - $22,200
Purchase and rehab costs - $44,600
Estimated after rehab value - $90K
Purchase and rehab equity - $45,600
Purchase price equity - $68,000
Gross monthly rental income each unit - $550/$550 = $1100
Estimated gross annual income - $1,100 x 12mos = $13,200/yr
Gross annual return - $13,200/44,600 = 29% return
Water/Sewer - $150/mo.
Taxes and insurance - $150/mo.
Property Management - $110/mo
Total Expenses - $410/mo
Net monthly income - $690
Net Annual Income - $690 x 12mos = $8,280/yr
Net Annual return - $8,280/44,600 = 18.5% return
Estimated time for completion – 6 weeks (45 days)
