- $175,000 duplex in play here
- 20% down payment ($35,000)
- Financing based on $140,000
- 6.95% interest, amortized over thirty years
- 5% appreciation (on average)
- Rents are $1,500/mo. (not escalating)
- Expenses are $6,920/yr and include property management, taxes, insurance, a healthy reserve fund and 5% vacancy
11,121 Debt Service
( 41) yr Cash Flow Before Taxes.
So the property is paying for itself. And that’s great! California real estate investors would kill for these numbers. Same is true in Florida and Washington and New York.
9,723 Debt Service
1,357 Cash Flow Before Taxes
So now this property is generating a fairly substantial monthly cash flow. At the end of the 6 year holding period the house will still be worth the same as our conventional financing house. Let us take the 6 years CFBT and we’ll show $8,142. We cannot add to that any principal reduction so the entire benefit from the first 2 Benefits only is $8,142.