Duplex Income, Equity & Upside ROI Analysis

The Investment Case

2400 Pardee Place presents an opportunity to acquire an occupied duplex with two existing income streams at an asking price of $385,000. Each residence has its own outdoor space, parking access, storage, and laundry facilities. The property's appeal is its established rental use and ability to generate income from two separate households.

The investment decision depends on how much of that rental income remains after the actual operating costs, capital reserves, and financing. The existing rent roll provides a useful starting point, but it should not be mistaken for the property's final investment return.

The seller reports annual operating income of $34,500 and operating expenses of $6,000, implying $28,500 annually before debt service if those figures are complete and accurately classified.

The actual leases, payment history, and itemized expenses must support that figure. Water, sewer, and pest control are listed as owner responsibilities. Vacancy, management, insurance, repairs, and capital reserves need to be accounted for in the investment scenarios rather than assuming the reported expense total covers everything.

Purchase price$385,000

Scheduled gross per month$2,875

Annual net operating income$19,123

Cap rate5.0%

Monthly cash flow after debt$-327

Scenario Comparison

Current income uses the rents entered for this property. Other cases are labeled assumptions and can be changed as better information arrives.

Measure	Current income Reported	Cautious case Assumption	All Cash Purchase Assumption
Scheduled annual income	$34,500	$34,500	$34,500
After vacancy	$32,775	$31,740	$32,775
Operating costs and reserves	$13,652	$13,569	$13,652
Net operating income	$19,123	$18,171	$19,123
Cap rate	5.0%	4.7%	5.0%
Monthly principal and interest	$1,921	$1,921	$0
Monthly cash flow	$-327	$-407	$1,594
Cash invested	$122,800	$122,800	$411,550
Annual cash on cash return	-3.2%	-4.0%	4.6%
Debt coverage ratio	0.83	0.79	Pending verification
Break even occupancy	107.4%	107.4%	34.8%

What the Numbers Include

Current income

Reported

Purchase price: 385000
Down payment %: 25
Interest rate %: 7
Loan term in years: 30
Closing costs: 11550
Upfront repairs: 5000
Initial cash reserves: 10000
Monthly scheduled rent: 2875
Other monthly income: 0
Vacancy allowance %: 5
Annual taxes: 1145
Annual insurance: 2400
Monthly HOA or community fees: 0
Monthly owner utilities: 250
Monthly solar payment: 0
Other monthly costs: 0
Management % of collected income: 8
Maintenance % of scheduled income: 8
Capital reserve % of scheduled income: 5

Use the current rent roll and documented costs.

Cautious case

Assumption

Purchase price: 385000
Down payment %: 25
Interest rate %: 7
Loan term in years: 30
Closing costs: 11550
Upfront repairs: 5000
Initial cash reserves: 10000
Monthly scheduled rent: 2875
Other monthly income: 0
Vacancy allowance %: 8
Annual taxes: 1145
Annual insurance: 2400
Monthly HOA or community fees: 0
Monthly owner utilities: 250
Monthly solar payment: 0
Other monthly costs: 0
Management % of collected income: 8
Maintenance % of scheduled income: 8
Capital reserve % of scheduled income: 5

Illustrative allowances. Adjust to verified property history.

All Cash Purchase

Assumption

Purchase price: 385000
Down payment %: 100
Interest rate %: Not supplied
Loan term in years: Not supplied
Closing costs: 11550
Upfront repairs: 5000
Initial cash reserves: 10000
Monthly scheduled rent: 2875
Other monthly income: 0
Vacancy allowance %: 5
Annual taxes: 1145
Annual insurance: 2400
Monthly HOA or community fees: 0
Monthly owner utilities: 250
Monthly solar payment: 0
Other monthly costs: 0
Management % of collected income: 8
Maintenance % of scheduled income: 8
Capital reserve % of scheduled income: 5

Illustrative allowances. Enter supportable rent and cost changes before publishing.

Strengths

Two occupied income producing residences.

Existing combined scheduled rent of $2,875 monthly.

Separate fenced outdoor areas, driveways or carports, storage, and laundry facilities.

No monthly HOA fee reported.

Potential flexibility for traditional investment ownership or future owner occupancy, subject to existing lease terms.

Tradeoffs

The property was constructed in 1954, making the condition of major systems especially important. The seller's $6,000 annual expense figure does not provide enough detail to establish a dependable operating budget.

The public remarks describe two 3 bedroom residences, while the MLS unit table identifies one 3 bedroom residence and one 2 bedroom residence. The discrepancy affects how the property should be evaluated and marketed.

The property is tenant occupied, and interior access is restricted. The listing photos were taken before current tenant occupancy.

Before Making a Decision

Obtain current leases, rent ledger, security deposit records, payment history, and confirmation of which expenses are paid by the owner.

Request an itemized operating statement, insurance information, utility bills, maintenance history, and any known major repairs.

Verify bedroom counts and unit configurations against permits and property records.

Inspect roofing, plumbing, electrical systems, HVAC, foundation, and individual unit interiors.

Confirm the condition of both residences and establish any immediate repair or capital improvement requirements.

Closing Read

2400 Pardee Place has a straightforward investment concept: two occupied residences producing a combined $34,500 in scheduled annual rent. The rent roll makes the income side understandable, while the reported expenses provide an initial reference rather than a verified final return.

At $385,000, the property deserves evaluation through both an all cash scenario and a financed purchase scenario. The deciding factor is the amount of dependable cash flow remaining after realistic expenses, reserves, and debt service.

Sources and Calculation Notes

MLS unit rents: $1,750 + $1,125 = $2,875 monthly per MLS unit table

MLS annual income: $34,500

MLS annual expenses: $6,000

MLS income less stated expenses: $28,500 (not a substitute for independently calculated scenario NOI)

The MLS reports $34,500 in annual operating income and $6,000 in annual operating expenses. The two reported rents reconcile to $34,500 annually.
The public remarks describe two 3 bedroom units, while the unit table identifies one 3 bedroom unit and one 2 bedroom unit. This needs verification.
The seller reports owner paid water, sewer, and pest control. The $6,000 expense total needs an itemized breakdown to establish which costs are included. The vacancy entry of 1.0 also needs clarification.

Gross yield uses scheduled rent divided by purchase price. Net operating income subtracts vacancy, operating costs, management, maintenance and reserves before debt payments. Cash on cash return divides annual cash flow after debt by the cash invested. These figures use the inputs shown above and should be checked against leases, actual expenses and financing terms.

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