All Forum Posts by: Dave Hurt

I originally posted this in my intro thread, but this forum seemed a more appropriate place. Not quite sure if we can call this a success story just yet - we still have to go through due diligence...but still excited to have the first (hopefully of many) multifamily property under contract!!

Brick duplex with identical 2/1 units

36k purchase price (most recent tax assessment was 65k). Motivated seller.

1 unit rented on a 12mo lease (renewed a month ago) at 475/mo, and the seller is to have a tenant in the second unit before the end of our due diligence period (April 15). We will rent the second unit for 500. Tenants pay all utilities.

We estimate 2k or so to 'freshen up' the vacant unit (new paint, appliances, some minor repairs).

Total cost = 38k

We obtained a 120-month interest-free private loan, so that puts our monthly financing cost at 316.67.

When you look at the property using the 50 percent rule:

975/2= 487.50 to cover our loan cost (and it ends up being 487.50-316.67 = $170.83/mo after putting aside 50% to cover insurance, taxes, cap exp's etc). Not quite $100/unit/mo but close, and after we increase rent in the second unit to 500, we'll just about be there.

So, the real numbers will be:

975.00 - 317.00 (loan) - 75.00 (prop taxes) - 30.00 (insurance) = $553/mo or $6,636/year which is basically ROI of infinity, since we put zero initial cash into the deal. If we use the tax estimate, we are also immediately gaining 29k in equity.

Overall, we are pretty happy with this deal, now let's hope nothing 'deal-breaking' turns up during inspection!

Thanks Patricia, and welcome to BP as well!

Here are a few details on the property we have under contract:

Brick duplex with identical 2/1 units

36k purchase price (most recent tax assessment was 65k). Motivated seller.

1 unit rented on a 12mo lease (renewed a month ago) at 475/mo, and the seller is to have a tenant in the second unit before the end of our due diligence period (April 15). We will rent the second unit for 500. Tenants pay all utilities.

We estimate 2k or so to 'freshen up' the vacant unit (new paint, appliances, some minor repairs).

Total cost = 38k

We obtained a 120-month interest-free private loan, so that puts our monthly financing cost at 316.67.

When you look at the property using the 50 percent rule:

975/2= 487.50 to cover our loan cost (and it ends up being 487.50-316.67 = $170.83/mo after putting aside 50% to cover insurance, taxes, cap exp's etc). Not quite $100/unit/mo but close, and after we increase rent in the second unit to 500, we'll just about be there.

So, the real numbers will be:

975.00 - 317.00 (loan) - 75.00 (prop taxes) - 30.00 (insurance) = $553/mo or $6,636/year which is basically ROI of infinity, since we put zero initial cash into the deal. If we use the tax estimate, we are also immediately gaining 29k in equity.

Overall, we are pretty happy with this deal, now let's hope nothing turns up during inspection!

Hi All,

Just wanted to introduce myself and say hello to the community. BP has been incredibly helpful and instrumental in my and my partner's learning process!

I am new to the world of buy and hold real estate investing and couldn't be more excited to be getting into the market right now. Like many of the members here, my long-term goal is to build a substantial portfolio of rental properties, so that I can eventually gain financial freedom from the corporate world!

We are based out of Charlotte, NC and have found this to be an outstanding rental market, with some great deals to be found. After much reading and learning on BP and through many books, we finally jumped in and currently have our first duplex under contract!

Thank you for being an amazing community and resource, and I look forward to sharing with all of you, and hopefully one day contributing a little knowledge as well :)