You just inherited $$75,000$ and you are considering investing all of the money in the construction of a multifamily property in:

Last name: A$-$H: Portland, Ore. near $15800$ NW West Union

Last name: I$-$P: Renton, Wa$.$ near $200$ SW $5$th Pl

Last name: Q$-$Z: Spokane, Wa$.$ Near $5111$ S Regal St

You plan to build a duplex. Each unit will have $2$ beds and $2$ baths

Pot$$ntial Income

How much monthly rent could you charge for each unit to be competitive with the nearest $5$ competing properties?

What is the maximum total GROSS potential monthly rent for both units? per month

With expenses @ $45\%$ of gross rent $//$ vacancy rate of $5\%...$ what is the NET monthly income? $ per month

What is the income per month after the mortgage payments are deducted from the net income? $ per month

Additional notes:

Market Competition

If you have trouble finding $5$ comparable $2$ bedroom $/2$ bathroom on craigslist, you can also use any of the previous web sites we have used to find comparables $($Zillow$,$

realtor.com,

trulia.com...$)$

If you still can't find $5$ then you can use fewer comparables or look at similar, but not exact comparables $(2$bed$/11/2$ bath, $2$ bed$/1$ bath$)$

Construction of Duplex $($

buildingjournal.com$)$

If you have not yet calculated the construction cost, use the residential estimator. The residential estimator allows for you to plug in building height, type of siding, basement...

Financing

When calculating mortgage payment

Total property cost will be: Land cost $+$ building cost

Total mortgage amount $=$ Total property cost $-$ inheritance $+$ closing costs

Potential Income

Maximum Total Gross Potential Rent $($MTGPR$)=2$ units $x$ each unit's monthly rent

NET monthly income $=($all income minus all operating expenses except for loan payment$)$

All Income $=($MTGPR $-$ rent not received because of vacancies $+$ other income$)$

All Income $=($MTGPR $-($MTGPR $*$ vacancy rate$)+$ other income$)$

For this assignment other income $=0$

Calculate all operating expenses @ $45\%$ of gross rent

Calculate NET monthly income for this example as pre$-$tax so tax bracket doesn't apply

NET monthly income $=($All Income $-($MTGPR $*\mathrm{.}45))$

Income per month after the mortgage payment $=$ NET monthly income $-$ mortgage

Once again this is all pre$-$tax so tax bracket doesn't apply