Recently I have found a Duplex property for sale. We will be dicussing if it is an opportunity or not, and helping your mind take a look at some of the numbers.
The first thing we are going to take a look at are the numbers to see if it works
The Sq Ft of these units are 650 ea, with one bedroom one bathroom. 4 units of course are in the duplex.
Appraised value $ 474,000
Initial purchase price $435,000
Intiial down payment $87,000
Traditional invester mortgage $348,000
Mortgage 2.7%
closing cost- legal fees $950
Inspection $500
Property tax transfer $4900
Total cash out $93,350
Rent $3200
Vacancy 1%
Vanancy amount $32
Net Rent $3,168
Strata expense $520
rental expense/ Management $200
Property tax expense $388
Utililities $0
Mortgage payments $1,408 (2.7% 5 yr fixed 30 yr am)
Total $2,516
Cashflow $652
Annual cashflow $7,824
As you can see, the house is $39,000 below the assessed value. Assuming this is number is true, that means your networth instantly goes up that much. The cashflow would be an estimate as you can only hope you don't lose your tenants but the rent levels would be quick to replace another tenant as they are average for the area. The building is fairly new, built in 2008. To make the best of this deal, we would need to add value to the property. Overall it looks like a nice property with positive cashflow, but you still need to add in repairs that may be needed in the future, as well as property insurance. Repairs will be good in a way considering you can use a line of credit against the equity of the house, Then the property will also go up in value from the improvements made to the property. Equity is great for a source of money you can use for another investment in the future.
These are my thoughts on a current deal I am looking at. The two ways of income I am looking for to do this deal is a JV partner, or to wholesale this deal. With this deal, you could also whole sale it with sellers financing closer to the appraised value for interest income witch is another good idea for this property. I have
an opportunity to get in at it for 428,000 myself.
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