How to Analyze a Duplex Rental Property (Real Life Example)
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- เผยแพร่เมื่อ 28 พ.ค. 2024
- ⭐ Join Rental Property Mastery, my coaching & learning community:
www.coachcarson.com/RPM-YT
🎙️ This video will show you how to analyze a duplex rental property using a real-life example. Whether you are a beginner or advanced investor, Coach Carson walks you step-by-step through the process and tools he uses to run the numbers on a real estate investment.
▶️ Next Video: How to Calculate Internal Rate of Return (IRR) for Real Estate Investing: • How to Calculate Inter...
🎬 Topics Covered:
0:00 - Intro
1:22 - Location romance
4:03 - Surface level location
6:53 - Surface level numbers
8:35 - What is our goal?
10:20 - 1% rule
13:38 - Unleveraged yield
17:53 - Look at property in person
18:28 - Spreadsheet for final result
20:29 - Determine market rent
23:19 - Spreadsheet numbers
28:17 - Good deal or not?
29:08 - Internal rate of return
34:07 - Only you can decide
🔗 Video Links:
Coach’s Real Estate Toolkit w/ Deal Worksheet:
www.coachcarson.com/toolkit-yt/
Coach’s Simple Rental Property Spreadsheet:
www.coachcarson.com/rental-pr...
Rentometer: coachcarson.com/rentometer
Zillow Rent Estimator: www.coachcarson.com/go/zillow...
BP Rent Estimator: www.coachcarson.com/BP-rent-e...
Internal Rate of Return: www.coachcarson.com/irr
Cap Rate Explained: • Cap Rate Explained (Pl...
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www.coachcarson.com/toolkit-yt/
🖥️ My Real Estate Courses:
[FREE COURSE] Find Your Focus in Real Estate for Beginners:
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30 Days to a Better Rental Investor:
www.coachcarson.com/30days-YT
Creative Financing for Real Estate Investors:
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📘 (My Book) The Small & Mighty Real Estate Investor:
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📙 (My Book) Retire Early with Real Estate:
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💰 DealMachine - Software to help you buy more real estate deals:
www.coachcarson.com/dealmachi...
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👋 Connect with me:
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🌐 For everything else: www.CoachCarson.com
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Footage and photos credits:
Pexels.com | Pixabay.com | Zillow.com | Rentometer.com
Here are my toolkit and spreadsheet: Coach’s Real Estate Toolkit w/ Deal Worksheet:
www.coachcarson.com/toolkit-yt/
Coach’s Simple Rental Property Spreadsheet: www.coachcarson.com/rental-property-calculator-spreadsheet/
You really hid that rental spread sheet on your website pretty good. Gotta get them click throughs 😂
spreadsheet not working
Thanks for heads up. Did you try to download it or make a copy? You can't edit it until you do that
@@CoachChadCarson Hey, what happened to Carlos is probably what is happening to me. It takes me to a page that wants me to subscribe to the newsletter. That works fine. Then once I click download and it goes to the next page, it says you want to have some questions answered etc. but it doesn't have a button to click to accept and go to those next questions nor do any questions pop up. It doesn't download the spreadsheet before this step either. Thank you for a quick response! I want am a brand new investor learning/shopping and this would be immensely helpful. Awesome information in the video!
Also, I tried both Chrome and Microsoft Edge. I don't have Mozilla on this machine but I assume if 2 don't work then the others wouldn't either.
Just found this video off a search. What a gem.
Same bro
Jesus. This video was exactly what I was looking for - your step-by-step thought process and analysis when you go about considering a rental property. Finally, a video that combines all (or many) of the tools I’ve read about and viewed via your Toolkit, videos, and other books that I’ve read, all in one place! THANK YOU, CHAD! You are truly the O.G. I always come back to your videos and processes because you’re so humble in your approach, so methodical, so pertinent. No fluff. No embellishments. Arrogant free. Clear headed and step-by-step as always. You’re one of the best teachers I’ve ever come across - Universities would kill to have you as a professor! I never fail to learn the most from you. Now…do you have, or would you consider doing a walk-through video of walking a property that needs work and pointing out necessary repairs along with how much repairs and cosmetic upgrades cost? Determining costs of repairs and aesthetics is yet another important thing I’m trying to wrap my head around. Thank you, Coach!!
Thank you Shawn. That's very nice of you to say all of that and it makes me feel good about putting in the time and money to make these videos.
About walk through- have you watched my 100-year-old triplex playlist? 100 Year Old TRIPLEX REMODEL Vlog: th-cam.com/play/PL5F-I4oW-y2EoCbkwMZrlJbStHVbxdsp3.html
It does some of what you are asking. But I will also keep that in mind for future video.
I also recommend Book on Estimating Rehab Costs by my friend J Scott.
@@CoachChadCarson Can't believe out of all of your videos I've seen I haven't come across that one yet. I will definitely check it out. Thank you for mentioning it! I have seen and considered checking out the book, however. Trying to wrap my head around all the other processes first though, but yes, I will totally check out the book. A video walk-through however, I think at least, will really help give us a better visceral feel of what to think about as you view a property, ie, what are your first thoughts as you walk around and inside, what stands out as needing fixing/replacing, what do you prioritize, what doesn't need to be bothered with, are you thinking of re-configuring the layout - adding bedrooms, bathrooms, the like, and if so, how much do you think things will cost, just how far do you go to make a property "stand out" and how much is considered spending too much. Seeing what you're seeing and thinking about in videos is priceless. Your modest and honest approach to this business is invaluable. Can't thank you enough for all your content, guidance, and down-to-earth, calm demeanor. You have the ability to make something that seems so overwhelming, actually seem possible. Just wish I had started this sooner in life!
Jesus approves
You're amazingly helpful. I wish you all the best Chad Carson
Thanks so much for all your help and info! Great channel.
Thanks for watching Jonathan.
So much value in half an hour! Thank you so much!
Thanks for the feedback and for watching, Taher!
Thank you Coach! Love the spreadsheets!
Happy to hear it! Thanks for watching.
Great job giving me the fundamentals on home buying and what's worth my time🎉
Thank you Coach excellent info
The most practical with real life examples
Excellent presentation
Wow , learned a lot from this video . Thxs coach
Thank you Coach Carson
Thank you for the very informative video Coach Carson 🙏🏽! I am buying my first multi-unit property in the USA. I’m from Canada. I want to start with a smaller 2-4 unit to learn the ropes. I am narrowing down which states and cities. A lot to analyze. This channel is very helpful.
Great video, thanks for the spreadsheet. You are the best 👏🏿👏🏿
Glad you liked it! Thanks for watching.
I really enjoy the way you break down the numbers. I'm really close to starting a rental business ❤
That's great! Please keep me posted.
Appreciate this thorough walkthrough with free spreadsheets! Totally value adding for someone like me who’s overwhelmed about getting started! Thanks Coach!
Glad you enjoyed it! Best of luck with your next steps.
thank you thank you . I've recently been teaching my self this information and this info was a great help!
Glad it was helpful! Good luck with your next steps.
This Spread Sheet is the best tool I've seen. Simple, easy to use.
Glad to hear it! Thank you
Thanks for this video
Great analysis. I enjoyed your presentation.
Thanks for watching!
Thank you Coach…Great video 🙏
I appreciate you watching.
Great info. Thank you.
Thanks for watching!
Am new here sir I really thankful I found your channel very helpful to me❤️
So awesome thanks great information 😊😊😊😊😊😊😊😊😊
Thank you!
Hi Coach Carson! Thank you so much for the tools. I have downloaded some and can’t wait to use them. Hopefully this year 2024! 🎉😃
Glad you like them! Best of luck to you in 2024! 🙌
Excellent video. Thx.
Thanks for watching!
This is the best explanation of IRR that I have seen. You are a great teacher!
Thank you so much Ted!
@@CoachChadCarson Hey Coach, I'm looking for your math for YOUR IRR calculations.... seems there is more than one version online. Can you share please... or link? Thank you
Very well explained coach Carson you're the best. Thanks for taking your time to put this up here. I must say real estate is a great place to invest my money right now. It can double every penny no doubt
Glad it was helpful, Bruno! Thank you for the feedback and for watching. Good luck with your next real estate investments.
@@portertrace5875 you're right sir but you need huge capital to start investing in real estate or you would be a landlord to make money
@@georgenoah4872 You don't really need huge capital to start investing in real estate. I got started with with a little less than 20k. Right now I have a units in real property and make about $5k - 7k as passive income monthly
@@brunoferrum1060 Congratulations
How did you achieve that?
@@williamsebastian5574 I work with a broker
Fabuloso, I've learned so much! Thanks!!! The only thing I don't understand is where the revenue got subtracted for paying down the loan.
Thanks!
Thanks Coach. Downloaded the spreadsheet and still looking for another property here in central Ohio.
Good luck with your search!
I just stumbled upon your channel by accident. I subscribed after the first video. You are amazing. Thanks for making investing understandable.
Thank you so much Keith! Glad to have you on the team. Welcome.
great video
Excellent 💯 💯 💯 ❤
Awesome Video
I'm down here in Columbia. My wife graduated from Clemson. I went to SC State in Orangeburg. Good to see a fellow South Carolina person doing big things.
Hey SC neighbor! Thanks for the comment and the support, Dexter.
@@CoachChadCarson do you buy wholesale flips in this area? If so let me know what you look for. I think I may have a few. I'm looking to get started in the business.
Coach Carson, that was a booming video!! Very in-depth n informative!! Thank you!! If I ran a scenario across your desk, how much would you charge me? I’m a simple neophyte at this n need wisdom n guidance please.
The best video I have ever seen on real estate in less than 1 hour. Thank you!!! Jonathan Guido Ghione.
Wow, thanks Jonathan!! Really appreciate the feedback and you watching the video Best of luck!
Nice videos!
thanks for watching!
Hi Coach thanks for all the info. It appears that I can't download the spreadsheet calculator - can you send me the link or advise me on how to get it plz
Great video Chad! I couldn't stop watching it. I came across my screen and boom, I was hooked! Now I gotta go and download your spreadsheet! Ha!
Thanks friend! I appreciate the feedback. Always good to hear from you. And I got your message about the spreadsheet so I'll double check on that. Thank you!
Very informative yet simple video to keep up with and with high quality information! is there a way that I can get access to the house desirability chart that you displayed?
Yes, the Deal Worksheet is where you will find that checklist. And it's in the video description and you can download it for free.
You rock, Coach! Do you have your real estate license (for investment purposes) or do you recommend it so we eliminate the realtor fee? Thanks!
Thank you! I have my license on dormant status, but I don't recommend it just to save fees. It makes sense if you want to do the side business or full time business of being an agent. If you were doing more volume - like flipping houses and buying rentals, it might make sense to get license for that. But for 1-2 per year I just pay other agents.
@@CoachChadCarson thanks! huge help
Hi, I just started watching some of your videos. Thank you for the spreadsheets and your thorough explanations on analyzing rental properties. However, I have a question on your IRR. The 10th year cashflow should be less. You've taken account the entire year cashflow, but unless you sold the property exactly by end of the 10th year then you're never able to get the full 10th year cashflow. It probably won't change much but it is an adjustment needed. Probably using half of the full year's cashflow would be more accurate.
Hi Vy. Thanks for the comment. Yes, I did assume it would sell at end of year 10 and that there would be a full year of cash flow. With a single family house you may need it vacant, but with a duplex I assumed we'd sell it rented. But yes - if that assumption were different you could reduce last year's cash flow by 6 months or so.
The Zestimate on that house now 2 year later is $232900. So it was a good investment and appreciated over 10% /year
Hi Coach, I’m working on looking for a multifamily in North Carolina that my family and I am house hack and turn into a profitable rental if/when we move out. Thanks for doing this video. Am I able to reach out to you with questions ? Thanks!
We set are buy box at south of 150k we want the property to be self discounted about 20% and the we ask for a 10% discount and then we pay 25% down and the rehab can’t be more than the 25% saved with what this does for us is it puts us in the cash flow with options we put 25% down to get out of pmi and we want to be all in at less then 75% of market valve so we are earning access to the appreciation value instantly so every year we get a gain from cash flow and appreciation.
You can only get up to 80% loan value on a rental property and for us if we have 25% of are money in it then we don’t pay pmi 1.5% so we could pull appreciation out at any time gain on both sides cash flow and appreciation
Hey Coach, thanks for this video. Quick question, does this spreadsheet count for Utilities in the expenses section? I didn't see it there in order to figure out the true monthly cashflow. Maybe I'm reading it wrong. Thank you!
I might have left it off. Good catch. In that case, you can add an extra row and just type in the utilities there. Thanks for watching and reaching out!
Hello coach, I put an offer on 3 unite property. I need your advise
Can you please make a video on how to analyze your first owner occupied duplex as a first time home buyer. Thank you.
great idea! I've added it to my future video list. Thank you!
Have you thought about renting theunits long term with an renter option to purchase for a fixed price and the renter receives a cretdit of 10%of the rent paid in rent over the rental years. It they decide to move out they can continue to option by subrental?
In some markets in the US, this type of real estate investment may make sense. Here in Kalifornia, the property taxes are too high and with the interest rates we have, it doesn't make any sense to buy investment properties. You'll get killed with property taxes, bad tenants, HOA fees not to mention the high interest on debt service!
Let's go Coach
Thanks DJ!
Hello Coach I'm in the middle of buying my first duplex. I'm planning on living in one unit and renting the other for a year. Do you have any advice on dealing with in place tenants? Any general advice or videos would be much appreciated!
Same!!
How’s it going so far Jose? Did you go through with it?
If we buy and hold . What incentive does an agent have or get paid to be our boots on the ground , if we are remotely investing
Is the 1% rule based on the rent for One Unit, or the Total Rent of all units combined? Thx!
All units combined.
Hey Chad, I know it’s probably me, but I’m not seeing the Rental Property Spreadsheet here, or in any of the replies, or your toolkit for that matter. Would you mind letting us know where to find it? Thank you.
Here are my toolkit and spreadsheet: Coach’s Real Estate Toolkit w/ Deal Worksheet:
www.coachcarson.com/toolkit-yt/
Coach’s Simple Rental Property Spreadsheet: www.coachcarson.com/rental-property-calculator-spreadsheet/
There we go. Now, I’m getting it. Thank you!
Thanks for the great resources and information. I have a couple of rental properties in a HCOL area (Toronto, Canada) and I’m moving to a medium cost of living area (Northern California). When trying to compare the properties, I’m having difficulty with deciding what to choose as the growth in property price. Would you go with 3% as the assumed rate of return for most properties in most HCOL markets these days?
It's a tough call choosing a growth rate because it's tough to really know. Here's a historical chart of Sacramento's price appreciation rate since 2000 (www.neighborhoodscout.com/ca/sacramento/real-estate). It's been over 5%. The question is whether history will repeat itself.
But one way you can stack the odds in your favor is choosing neighborhoods that will likely appreciate above average compared to the whole area. So even in areas with 3% average growth, some neighborhoods grow at 5% rates. That's a big part of what I teach on the channel and in my courses.
realtor fees included in purchase costs? pp + closing + fees
Can I get your opinion on a property I'm under contract with in ladson SC? I live in North Charleston SC and this duplex is 10mon drive. Can we figure out how to private message the details?
If local codes permit-and in hot rental markets-what about a twist on “house-hacking”?
Converting a 3-bedroom, 1 bathroom, 2-car garage SFH into a 2-bedroom duplex?
Garage & Master Bedroom square footage for the additional bedroom, bathroom, kitchen, dining/living areas?
A rental “two-fer”?
Potentially, 2 income streams for the price of one?
Yep! Good idea (and definitely have to check codes first)
Hey Coach, I just bought my first investment property, I will be living onsite and building units in the back using a law specific to my state. I thought it might make a good video for you to analyze the property's potential.
Let me know if that interests you.
Thanks!
Congrats on your deal, Brian! What kind of units are you building on site? I'd be interested to hear more details here.
@@CoachChadCarson the property has a 1630 sq ft SFD. We plan to renovate the existing structure.
Then build a new 1600 sq ft duplex (2) 800 sq ft units in back.
Then extend/convert the garage into an 800 sq ft unit as well.
Giving us 4 units total! We're excited
Analysis
What strategy would be ideal , now that interest rate are high and doing a brrr is harder to achieve?
Thx
Using existing financing (subject to) or owner financing (seller carry back or lease option) are great strategies now.
Since the banks count some of the income on what the future rent would be for that tenant does that mean that i can afford a 650k duplex making 100k a year with 10% down conventional? I dont not see anything cheaper in the entire tri state area where i live.
Hey Coach, how can I get calculated the comparable rents for a multi family unit?
Hey Davion, I use Zillow rentals, BP rentals, and sometimes Rentometer to get comparable rentals units. You can do it for apartments in a multiunit or houses.
@@CoachChadCarson okay , well it’s just that some those platforms ask for bed and bath amounts , though nothing separating the idea of the fact or consideration that it’s a multi unit ; so is it total bed and bath per properties no Matter the the unit separation factor ?
@@Davion_savant Just tried 'Rentometer' for example... Just put in the data for one apartment at a time of your multi-family and get the rent range for JUST that apartment, then do the same for each apartment in your multi-family
@@afaafa9161 ok , thank you , are you an investor or something?
@@Davion_savant Yes I am.. I evaluate / buy duplex and up rental properties.
I'm wanting to move up to the Spartanburg area. I'm wanting to buy a duplex to house hack for a year. Is it possible to purchase with an FHA loan? I have 20k saved up for the entire process and am wondering if that's doable.
That's definitely possible to buy a duplex with an FHA loan. And congrats on saving the cash! Spartanburg is a great city.
I wonder why being close to the road is an issue? I’ve lived in the northeast for over the last decade, where it’s all close to the road and medium density.
I wanted the excel sheet and clicked the link and it's just a never ending BS bait to sign up for his email letter. You never actually get the excel sheet. Video itself is very helpful! I just wish I could get that sheet easier.
Not sure what you mean by never ending. You click a link, you go to a simple page with nothing else but a request to put your email in to get the sheet, you get an enail with the excel sheet in 5 seconds. If you want to unsubscribe, click the unsubscribe like on that first email. Easy peasy.
i have a question on around minute 8:17 why is it a red flag if the property is higher than the rest of the neighborhood. i get that its more expensive but is there any other information you can extract from the price increase and why is it a bad thing other than its more expensive than the houses around it
I think it's generally because most neighborhoods have a price ceiling. Appraisers like to use close by comps and buyers may get nervous being the highest price. So it's not imposible that it's a good deal just something to be cautious of. It's harder to value.
So for IRR, that's an annual percentage, correct?
That's correct. Annual.
Duplex analysis
I didn't see the spreadsheet
Here are my toolkit and spreadsheet: Coach’s Real Estate Toolkit w/ Deal Worksheet:
www.coachcarson.com/toolkit-yt/
Coach’s Simple Rental Property Spreadsheet: www.coachcarson.com/rental-property-calculator-spreadsheet/
Do a new construction duplex video
To qualify for an FHA loan for as little as 3.5 percent down, you have to live in the duplex for at least a year. Who checks this? Can you claim to live in one of the units but rent it out anyways?
Question:
If I pay rent to a CHURCH can I write that off on my taxes.
The home is owned by a church , my $1500 payment is Paid to "Name of the church" on every check . Cannot this be a tax write off?
Never heard that situation. So, I honestly don't know.
But my guess is that you can not write it off. You're receiving a benefit (a place to live) and not making a donation.
How to find a good property manager
The short answer is always referrals for me. Which means you have to take some time to network with other local investors through real estate meetups, Facebook groups, and BiggerPockets forums.
Does this account for taxes?
Here is a tip, if your house is close to a fire hydrant, tell your insurance company. It will lower it.
Good tip! Thanks.
I would think the 1% rule would apply if you want to pay it off in 10 years.
Real inflation is 18+%,
Avg. Debt service interest 7+%.
Rule of 72 = $ will be halved in 4 yrs.
Why buy unless IRRs are > 25%?
Hi Coach! I am going crazy trying to find your phone number. I don’t see our conversation re: investing in your 50’s. Can you resend? Thank you!
Is it this video Nancy? th-cam.com/video/irJWjhlVS-k/w-d-xo.html
Yes! Would love more like these!
How leveraged rental investments are better than unleveraged (all cash) investments hurts my conservative, risk adverse brain. Actively searching for content to help become more comfortable with it.
unleveraged can work just fine as well. I'm not in that real estate camp that thinks the only way to make real estate work is a bunch of debt.
If you buy a property that makes a 7% return from the rent and 3% growth, that's a 10% return. Hard to do that consistently in the investment world, and it's super simple in real estate (with no debt).
If you add leverage you can 2x or 3x those returns, but it also comes with more risk. If you get long-term debt and use it carefully, I think it's worth the risk early on. But everyone has their own approach! You do you!
Thanks for stopping by.
I just finished watching podcast 293 (four reasons to pay off debt) and episode 304 (retire in Portugal)@@CoachChadCarson Serendipitous, because (1) I am 54 (2) worked software and startups for last 20 years (3) selling house in San Diego home to invest in rentals for passive income streams (4) to relocate/retire early to Portugal or Spain (will decide in 3-4 months) in summer 2024. Your content has been insightful and helpful. Thank you!
If you had invested that same amount of money on meta one year ago you would have had a 300% return
More like 169%. But it's harder to pick winning stocks than winning real estate (for me)
@@CoachChadCarson my mistake almost 300% return. Not sure why anyone would want the scraps of real estate returns and all the headaches, when I could invest in supermicro computers and within one year go from $89.00 to over $1,000. You can take that to the bank. Your videos do offer a lot of value. I would love to get into a multi-family so I can have the opportunity to bring in all these lowlifes here just to f them over. With all the money I've made in the market, I don't have to worry about getting a loan or waiting 30 years to get cash flow. But seriously when I think about how nice it is to just wake up knowing just in pre-market trading I can make 50k - 100k before getting coffee I don't see why I would even think about getting into real estate although I do want to help buy it so China doesn't take it all from us.
An actually helpful video where the guy talks about REAL stuff? Thats kinda shocking 😂
I guess that means there's other non-helpful, unreal stuff out there in TH-cam land 😂
thanks for watching!
See my house I’m from easley
I didn't smash it. I tapped it.
Either works! Thank you!
Its impossible to meet the 1% rule…
Depends where you are. And what type of property. Not imposible.
Lmao "literally takes 10 - 15 seconds to know this is a good location"......Definitely going to take several hours to know all the info you started the video with (schools, distance from downtown, nearby cities etc)
Not a good deal.
You use a lot of jargon that the newbie like me finds real estate education is required
Thanks for the feedback. Would you mind letting me know any particular jargon that was confusing?
Clemson is going downhill
Hope not!
GOTTA MAKE THIS STUFF A BIT EASIER TO UNDERSTAND MAN. UR TALKING TO US AS IF WE'RE EXPERTS. AND THAT CHEATSHEET WAS NOWHERE TO BE FOUND. I SIGNED UP AND EVERYTHING NOW IM IN A MAILING LIST FOR SOMETHING THAT DIDNT HELP AT ALL. AND THE WEBSITE IS VERY MUCH TOO MUCH HAPPENING AT ONCE.
Thanks for giving it a shot, Jay. The spreadsheet got emailed to you right when you signed up. Have you checked your spam filter? An you're welcome to unsubscribe from the newsletter. It's 100% voluntary.
What part of the investing business are you trying to understand right now? I get it that sometimes certain videos have too much info?
If you haven't watched it already, this playlist has my best videos for beginners: th-cam.com/play/PL5F-I4oW-y2HzDDUGdPgpMd0qiIE19osb.html
Your spreadsheet doesn't work. You're smarter than that. Are you sending out clickbait so people give you their email address??
His spreadsheets work perfectly fine.. I've used them to supplement my own (like adding the appreciation factor.. great idea). Check that you're not inputting data where you shouldn't be.
Where is spreadsheet