Feedback: Would u buy this Ontario duplex?

[donksky]

Hello, would you buy this for $325k mortgage ($320 purchase price, + 7.85% CMCH insurance premium-100% financed) in a farm town in Ontario? side by side 2+1 duplex. always rented - walking distance to a college in a 0.5% vacancy town (same shortage or worse? for students), walking distance to biggest plaza of big box stores in town where thousands of out-of-towners make the trip to shop as it`s the nearest big city with these kinds of stores. Good, solid brick building. Not a lot of comps on semis that r 2+1--there`s only a bdr. in bsmt. but a good one.thxREVENUE:
SIDE #1 – 2+1 BDRMS $1350/MTH + HYDRO
SIDE #2 – 2+1 BDRMS $1350/MTH + HYDRO
TOTAL PER MONTH $2,700.00/MTH
REVENUE TOTAL IS $2,700 X 12MTHS = $32,400/YR.

EXPENSES:
P&I ($302x1.0785% for 0-down=$325k;0.6% below 4.15% but use 4.15%, 40-yr. amort.=$1382) $16,584.00
TAXES (2007) 1,759.38
WATER 1,172.46
HWT RENTAL 222.81
GAS 2,036.93
INSURANCE 1,230.00
Snow removal/grass cutting/Maintenance 2700.00
TOTAL $ 25,706

TOTAL INCOME: $32,400.00 - 25706= $6,694/12=$557/month CF less $135 vacancy (5%)=$422/month less $162 mgt.(6%)? or 0?-4 hrs away from me....

 

[terri]

QUOTE QUOTE (donksky @ Sep 4 2008, 07:06 PM) Hello, would you buy this for $325k mortgage ($320 purchase price, + 7.85% CMCH insurance premium-100% financed) in a farm town in Ontario? side by side 2+1 duplex. always rented - walking distance to a college in a 0.5% vacancy town (same shortage or worse? for students), walking distance to biggest plaza of big box stores in town where thousands of out-of-towners make the trip to shop as it`s the nearest big city with these kinds of stores. Good, solid brick building. Not a lot of comps on semis that r 2+1--there`s only a bdr. in bsmt. but a good one.thx
REVENUE:
SIDE #1 – 2+1 BDRMS $1350/MTH + HYDRO
SIDE #2 – 2+1 BDRMS $1350/MTH + HYDRO
TOTAL PER MONTH $2,700.00/MTH
REVENUE TOTAL IS $2,700 X 12MTHS = $32,400/YR.

EXPENSES:
P&I ($302x1.0785% for 0-down=$325k;0.6% below 4.15% but use 4.15%, 40-yr. amort.=$1382) $16,584.00
TAXES (2007) 1,759.38
WATER 1,172.46
HWT RENTAL 222.81
GAS 2,036.93
INSURANCE 1,230.00
Snow removal/grass cutting/Maintenance 2700.00
TOTAL $ 25,706

TOTAL INCOME: $32,400.00 - 25706= $6,694/12=$557/month CF less $135 vacancy (5%)=$422/month less $162 mgt.(6%)? or 0?-4 hrs away from me....


Hi Donna,

did you allow for maintenance and repair?

 

[ShannonMurree]

QUOTE (donksky @ Sep 4 2008, 10:06 PM) Hello, would you buy this for $325k mortgage ($320 purchase price, + 7.85% CMCH insurance premium-100% financed) in a farm town in Ontario? side by side 2+1 duplex. always rented - walking distance to a college in a 0.5% vacancy town (same shortage or worse? for students), walking distance to biggest plaza of big box stores in town where thousands of out-of-towners make the trip to shop as it`s the nearest big city with these kinds of stores. Good, solid brick building. Not a lot of comps on semis that r 2+1--there`s only a bdr. in bsmt. but a good one.thxREVENUE:
SIDE #1 – 2+1 BDRMS $1350/MTH + HYDRO
SIDE #2 – 2+1 BDRMS $1350/MTH + HYDRO
TOTAL PER MONTH $2,700.00/MTH
REVENUE TOTAL IS $2,700 X 12MTHS = $32,400/YR.

EXPENSES:
P&I ($302x1.0785% for 0-down=$325k;0.6% below 4.15% but use 4.15%, 40-yr. amort.=$1382) $16,584.00
TAXES (2007) 1,759.38
WATER 1,172.46
HWT RENTAL 222.81
GAS 2,036.93
INSURANCE 1,230.00
Snow removal/grass cutting/Maintenance 2700.00
TOTAL $ 25,706

TOTAL INCOME: $32,400.00 - 25706= $6,694/12=$557/month CF less $135 vacancy (5%)=$422/month less $162 mgt.(6%)? or 0?-4 hrs away from me....





Plus if it`s 4 hours away from you, who`s going to manage it? You`d also have to include either your property management fees and/or your gas/time and additional costs for contractors/repair people, etc should something happen.

 

[BoydG]

Looking only at numbers, I would submit an offer... but as I don`t know the Ottawa market, I won`t even guess what the right offer would be.

That said... here are a few other things to consider:

1. Age and shape of the building... any major deferred maintenance issues coming up soon? Property inspection should reveal these, if any.

2. Are there tenants currently? If so, when can rent rates be reviewed and raised (and by how much!)? If not, what is your market rent? Re-run your numbers and determine C/F accordingly.

3. Any immediate renovations required? Costs?


Just some (semi) random thoughts. I`m sure others will chime in.


Good luck!
Boyd