Turnkey investment opportunity in the high growth I-35 corridor between Austin and San Antonio. This luxury duplex (built in 2016) is currently 100% occupied with great Tenants in place until Summer 2019. Professional property management is also in place at a very attractive rate of 5% of gross rents. Perfect for a 1031 exchange or if you’re looking to add a quality multifamily asset to your portfolio.
Two-story investment duplex in a recently constructed community in New Braunfels near the medical center. Offering granite countertops, wood tile flooring, large kitchen w/ plenty of cabinet space and nice-sized rooms and layout. Private outdoor space for entertaining outdoors. Close to downtown New Braunfels and right behind Medical Center and entertainment hub, including Buccee’s!
| 6 Bedrooms 4 Baths | Year Built: 2016 |
| School District: Comal ISD | Size: 2743 SF |
| Property Type: Duplex | Market: I-35 Corridor |
| Price/SF: $ 138.53 | Rent/SF: $ 1.09 |
| Asking Price | $390,000.00 |
| Market Value | $390,000.00 |
| Purchase Price | $380,000.00 |
| Down Payment | $95,000.00 |
| Initial Repairs | $0.00 |
| Closing Costs | $5,700.00 |
| Investment Capital | $100,700.00 |
| Rent | $2,990.00 |
| Vacancy | $0.00 |
| Property Taxes | $626.23 |
| Insurance | $75.00 |
| HOA Fee | $50.00 |
| Maintenance and Repairs | $119.60 |
| Property Management | $149.50 |
| Leasing Fee | $124.58 |
| Landlord-Paid Utilities | $0.00 |
| Total Operating Expenses | $1,144.92 |
| Net Operating Income | $1,845.08 |
| Mortgage Payment @ 5.25% – 25% Down | $1,573.78 |
| Monthly Cashflow | $271.30 |
| Principal Paydown | $334.12 |
| Appreciation Return | $1,022.83 |
| Annual Depreciation Deduction | $11,349.00 |
| Total Monthly Return | $1,628.26 |
| 10-Year Annual Rate of Return | 12.43% |
| Cash-on-Cash Rate of Return | 3.23% |
| Note: For illustration purposes only. Investors are encouraged to do their due diligence and verify all information. Listed by Redfin | |
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Cash on cash should be double digits if using leverage or it makes no sense to be a landlord. If you can’t get double digits look in other makets.
Roman
Thanks for reading and for your comment.
I respectfully and absolutely disagree. 🙂
When investors “marry” themselves to an arbitrary rate of return they put themselves on a path that will likely lead them to two possible destinations.
The first is a low-quality investment with high cash on cash returns on paper only. The second is complete inactivity (and that could be the worse of the two).
Think about it this way: If the going cash on cash return rate in a market is, say 5%, what could cause a property to yield 10% instead? And after you’ve contemplated that, think about why the owner of the said property would be willing to part with the property at such a low price that yields double the going rate of return?
You can expand that line of questioning from market to market as well.
Erin,
In my opinion, Everyone has different strategy and goals plus each RE market is different. Some maybe happy with 3.3% cash on cash return in hope of future appreciation and/or long term marriage to that property. I don’t know Austin or San Antonio market but I know that 8% cap (no leverage) will give a much higher cash on cash return if leveraged. I buy in South Florida and Atlanta and I achieve these returns and if I was to leverage then I will be looking at 12%+ cash on cash.
All I am saying is that double digits are better then single digits and it is the bottom line that matters because it will take you across the finish line to financial independence faster.
In this particular case, the fact that investors are willing to accept such low rates of return is an indication of either high appreciating market (which won’t last forever) and maybe an overheated market. Both are impossible to time. So good for those that sell at low cap rate and take their profit to higher cap area (hopefully tax free if they use 1031 exchange ).
Roman
I’m with you 100% on the idea that investor goals and strategies vary along a wide spectrum.
My point is that a 3% cash on cash return on a high-quality property cannot be compared to a higher cash on cash return on a lower quality investment because you have to adjust for the added risk. If an investor is fine with the added risk, that’s a different story. But we can’t compare return figures without the context of risk.