Everyone has different standards. I’d like to see any examples of what you would consider a “good” deal including mortgage payment, insurance, and taxes to see what I should be looking for!
Can someone give me an example of a good duplex or triplex deal (real or fake scenario)?
byu/SwissMade21 inrealestateinvesting
Posted by SwissMade21
2 Comments
I found this duplex running my model the other day:
https://www.zillow.com/homedetails/2679-Woodlawn-Ter-Memphis-TN-38127/42226894_zpid/
It’s currently rented for a total of $1450/month and when I run it through my model at a total of $1590/month, I’m getting a monthly cash flow of $376, cap rate of 11%, and 5yr IRR around 27%. So could even keep rent at the current rate and still be around 9% cap rate and ~20% IRR.
I can send you a screenshot of the quick figures that I got in the email if you’re interested.
Triplex in a mid-tier market, purchase price $300k, 25% down so $75k out of pocket. Each unit rents for $900/month, total gross rent $2,700/month.
Mortgage at 7% on $225k comes to roughly $1,500/month. Add $400 for taxes and $200 for insurance, you’re at $2,100 in fixed costs. Factor in 10% vacancy and 10% for maintenance/capex and you’re looking at about $2,640 going out.
Barely breaks even on paper but you’re building equity, getting depreciation benefits, and if rents are growing in the market you’re in a solid position in 3-5 years.
A ‘good’ deal really depends on your market though, that same triplex in a cheaper market at $200k purchase price completely changes the math. What market are you looking in?