Hi all!
I am checking out a lead on my first OOS investment. MFH duplex (2 bed 1 bath per unit) in KC, KS. I will be using investors (parents) to finance the property and they are willing and able to pay all cash. Property info as follows:
Price: 120,000 (expecting to pay more like 130,000 because a lot of shown interest in the property)
Condition:
1960. Doesn't look like it needs a whole lot of work. Exterior isn't
the best but decent. Fully occupied with a M/M tenant of 4 years
($575/month) and a leasing tenant that began in 7/21 and ends in 6/23
($650/month). Possible new roof running at 5/6k.
Rental income: $1225/month
Expenses:
Property taxes: $120/month
Insurance: $121/month (quoted)
Repairs: 10% ($122/month)
Vacancy: 10% ($122/month)
Cap ex: 10% ($122/month)
Management: 10% ($122/month)
I plan on tenants paying for everything else. It has separate meters.
If I'm doing the numbers right, it should cash flow $575 per month.
1. How do I incorporate a return for my investors from this cash flow? How would I structure a deal?
2. Am I missing anything? These numbers seem too good to be true!