Any Thoughts On This 2 Duplex Deal?
I was looking at two duplexes that were recently built. The asking price for each was 175,000. I did some research and found that the 12 other duplexes in the new sub division have sold for between 175,000 and 180,000. I called the builder and he has 3 lots left and stated that he would build me the same duplexes for 165,000 since he would not have to use a real estate agent.
I would like to buy them by putting down 20 percent then refinancing after 6 months when I know they will appraise between 180,000 to 190,000 (I know the appraiser) so that I can pull some of my down payment out. I would still keep approx. 25,000 in each property. Below I set out the numbers, but basically with 750 rent (one duplex 30 yr. fix and one duplex 5% arm) my profit would be a little over 950. With Tax savings I estimate I will have about 16,000 in cash flow a year. Does anyone see a problem with this deal?
2nd question: I have been told that if I build I should shoot to have them completed in April or May, because it is easier to find renters in these months. I was told that it is hard to find renters in Dec. Jan. Feb. Any thoughts?
Investment Property
Duplex 1
Price 165,000.00
Down pmt 25,000.00
30 year note 140,000
Int. Rate 5.23
Payment 771.35
Taxes 200
Insurance 100
1071.35
Rent 1500
Profit 428.65
Duplex 2
Price 165,000.00
Down pmt 25,000.00
30 year note 140000
Int. Rate 4.78
Payment 686.26
Taxes 200
Insurance 100
986.26
Rent 1500
Profit 513.74
942.39
I'm wondering are these rates all on 5 year arms and how are you getting such good rates. I have my duplex N.O.O on A 30 YR FIXED AT 6.375
the only problem i see with your deal, is the low rates
wish i could get them haha...but it looks good to me
the numbers add up....does it give you the feeling of too good to be true? i dont undersand
looks good to me just trust yourself...
the deal looks good
~Andrew
just an FYI...rent - PITI doesn't not equal profit...
profit is an accounting term referencing the accrual method and such things as depreciation should be taken out to figure profit...but...
Also, rent - PITI doesn't equal Net Operating Income either
you have to account for vacancies/collection loss, repairs/maintenance, reserves, utilities you might be paying(i'm guessing they must all be on seperate meters?)
Its really just cash flow after PITI, I don't have a better title than that....
Are taxes really that cheap where you live?