Non-conforming duplex

with seller financing

Ogden, UT

Cash Return: 18.3%

ROI 53.7%

Seller financing on this non-conforming up/down duplex next to an elementary school in the heart of Ogden. Each unit has 2 beds and 1 bath. Property has been updated with modern kitchens and bathrooms. Take over their underlying loan ($355k balance, 2.625% interest). The remaining $91k in equity is covered with a $60k down payment and a $31k note at 5% interest-only. Duplex needs a washer/dryer in the upstairs unit and a door at the bottom of the split-level stairway.

property details

4 bedrooms

3 baths

2,016 sq. ft.

built in 1972

deal highlights

monthly cashflow $970

annual tax depreciation $27,563

cash return 18.3%

ROI 53.7%

closing terms

SELLER FINANCING TERMS

purchase price $446K

down payment $60k

term 5 years

monthly payment $2,230

underlying loan $2,101 ($355k, 2.625%, 30 year AM)

equity payments $129 ($31k, 5% interest-only)

ADDITIONAL COSTS

closing $2K

repairs $2k

5-year proforma

Expect monthly cashflow in the first year just under $1,000 that will increase as rents continue to rise in Ogden. Appreciation in home prices will drive growth in equity. Principal paydown on the underlying loan in the first year is $9,081. Home values and rents are modeled to increase a conservative 3% year over year. The sum of cashflow, loan pay down, and appreciation is expected to be $34,101 in the first year alone. A cost segregation study can be performed to allow you to rapidly depreciate the property for significant tax benefits that will cover passive income and help write off other gains. Total ROI in year 1, not considering tax benefits, is 53.7%. The 5 year ROI is projected to be 298%.