Posted by Bill K. (AZ) on May 23, 1999 at 12:17:35:
I’ll give you my standard analysis.
Monthly Income: $1,570
Expenses: $471 (including taxes, insurance, vacancy, repairs, etc.)
Mortgage Payment: $1,161
NEGATIVE Cash Flow: $62/mo or $744/yr
I used your 30% figure for expenses in my calculation, but I think that 30% for a 30-year old duplex is too low. I’d use 40%. At 40%, your negative cash flow jumps to over $200/month.
Seller financing is nice, but not if the property won’t support it.
I don’t know where you live, but nice 30-year old duplexes in Phoenix are going for $90-$120,000. What is your estimation of value for this property? Almost $90,000 per unit sounds awfully steep.
If you’re paying full market value, and you’re holding this property with a negative cash flow, when do you make some money? If you’re counting on appreciation, I’d walk. You need to make money going into the deal. I don’t see that here.
I hope this helps.
Bill K. (AZ)