Out of state owner says SELL this Kansas City, Kansas duplex. The owner's priorities have changed over the years and now he is moving on. That means he's held on to this duplex for sale too long and just wants to move on. His loss is your gain. Each side rents at $695. One side is currently occupied and the other side is getting some minor renovation done before new tenants are placed. It's had a good occupancy history and has been professionally managed.
Attention Real Estate Investors: As of 7.2.2009 the owner has dropped the price to $87,500. He wants to move on. Now how would the numbers look?
Do the math.
You buy at $95,000. Each side is bringing in $695 you are at $16,680/yr. Follow? Look below.
Estimated Expenses
$1,668 Property management
$1,400 Vacancy
$ 500 Utilities
$2,300 Taxes
$1,500 Repairs/maintenance
$ 900 Insurance
$ 500 Misc
Total Expenses equal $8,768
Net Operating Income is appox $7,912
Your mortgage payments add up to $505.63/mo. (That's 20% down leaving a mortgage of $76,000 at 7.0% interest since it's an investment property loan.)
NOI - Debt Service = Cash Flow
$7,912 - $6,068 = $1,844 /yr cash flow
Your Principal Reduction = $715 (approx 1st year)
Your Tax Benes = (NOI - interest - depreciation) $85 (approx 1st year)
Total 1st year benefits (approx) = $2,644
Cash invested (down payment, closing costs, etc) = $22,300 (approx)
First year return as a percentage = 11.9%
Now what would the numbers be if you managed the property yourself?
All numbers are of course estimates and this is not a guarantee of performance. Just trying to use all the numbers I know.
