Hi All,
First time poster! I really appreciate the advice you give on these forums! I have gobbled up a lot of information here! Thanks for your help!
We (Wife and I) have two duplexes on the same block that we bought a year and a half ago. I saw another one for sale and it's very similar to what we already have, and about a block down the street from ours. It hasn't been long enough to really know what the real-world averages are for our properties yet, so I could really use a gut check to make sure we aren't digging a deeper hole with buying a third duplex.
This past year we had an tenant eviction (they came with the property- not our pick), a major re-siding project, and numerous repairs with plumbing, doors, and window replacements. I've done most of the work myself, but I do have a property manager for collecting rent, getting the call at 1am that the water is leaking, and finding new tenants when vacant. So we didn't make much $$ last year, one rental grossed a thousand or so, and the other lost a couple hundred. I don't think that's going to be typical, but that's partially why I want to get your advice on this third property.
Here's the details:
Property Description: 1910's duplex on slab foundation with 2br/1ba 760sqft each side 2 car garage for one, shed for the other side. Quiet residential and duplex neighborhood in good area. All brick exterior and <5yr old roof
Market Value: Hard to quantify. I would say it's selling at market.
Original Purchase price: $88,000 (obviously hoping for some negotiation here)
Original Mortgage Amount: $66,000(25%down)
Interest Rate: between 4.5 & 5%
Mortgage Term: 30 years
Gross Rents: $1110 ($550 and $560) These are market rents as I have new tenants in ours at these prices.
Principal and Interest (the P&I of your PITI - should match with the above info): $353/mo
Taxes and Insurance (the T&I of your PITI): $180/mo
HOA costs: $0
Lawn and Trash: $40/mo (averaged by year)
Management fee (10%): $111/mo
Deferred maintenance notes: no major projects/repairs currently known
Maintenance/repairs budget: $250/mo Is this a safe estimate? I included some big ticket losses every few years for rehabbing or major issues.
When I add it all up I see about $100/month cash flow with 92% occupancy. Does this look like a sound investment? Am I missing something? This would definitely tap out our borrowing potential for a while. Thanks again for your help!