All Forum Posts by: Jonathan Sher

Bill, Thanks for the reply. I have tried to look at comparable properties in the area but it is difficult. There is an identical property down the street that is listed around $155,000. It has been sitting for a while so its obviously not the right price. There's a couple more identical size/type duplex's on the other side of the street that are listened in the low 160's and those have been sitting for over 6 months now.A quick analysis of the $155K one with a cap rate. Lets say the NOI is around $11,000, thats a cap rate of 7 at the 155K price, which seems fairly rich. I'm just having issues comparing properties in the area.... Im not dealing with any financing so im not being forced by a bank to get an appraisal of the property. Do you think its a good idea to have it appraised during inspections if I get a contract on the property?

Some more of my analysis,

if i get into the property around 135,000 (including purchase price an rehab) with my eventual debt service I have estimated $2,700 annual cash flow. 25% down ($33750) thats around a 8% return on equity

Hello everyone. This is my first post on the forum besides the new member area. I have been reading a book about investing in Duplexes, Triplexs and Quads. So far, the author has expressed his use of GRM (Gross rent multiple) to do a quick analysis of a property. This ignores expenses, but the author say's that expenses should be fairly constant, which you could argue they are not. What is your method of analyzing a duplex? I am currently looking at a couple of duplexes for sale around my college town. I have found a duplex that is in foreclosure and is 100% vacant. Here is my analysis of income and cash flow

rents $700 x 2 = $1400 a month

Income $16800
Yearly Expenses
($1500) insurance (estimate)
($900) Landscaping
($1,000) Miscellaneous Maintenance
($2,000) Management fee (Don't really have a choice since I will be in saint louis

EBIT = $11,400

($1,700) Taxes (last year was $1500 so I gave myself room)

I get a NOI of 9700 without depreciation and debt service.

Here is my issue, I don't know what to pay for the property.

1.The kitchen's need to be remodeled on both sides, I have a friend that does construction so we would take care of most of the labor. Basically needs new tile, cabinet doors, appliances (including washer and dryer)
2. Need's new garage doors (I think the motors work just needs doors)
3. I won't know the integrity of the room until inspection.

I am going to make an all cash purchase at first so I don't have to worry about financing and paying a mortgage when its vacant... I estimate (and clearly estimate) that I could get away with spending $15,000 on rehabbing and making it look nice without any major finds.... SORRY for the long post

Hi everyone, My name is Jonathan from Saint Louis/Columbia Missouri. I am a Senior Finance and Real Estate major from the University of Missouri. Just wanted to say hello and I look forward to asking questions and learning more than you learn in the classroom. :D