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Show Notes
Welcome back to The Paul Morris Podcast, brought to you by Entrepreneur Media. In this episode, I walk you through a real $850,000 duplex I analyzed this week and break down exactly how I underwrite deals in today’s market. At a 5 cap with mortgage rates around 6%, most investors would immediately pass. But when you look closer at below-market rents, long-term leverage, and the ability to add two ADUs, the numbers start telling a different story.
I’ll show you how cap rates and interest rates actually interact, when leverage helps you and when it hurts you, and why I’m willing to consider a deal that isn’t a “screaming steal.” This is a transparent look at how I evaluate risk, think conservatively about debt, and search for built-in upside in expensive markets like Los Angeles. If you want to understand how to analyze real estate beyond the hype and make disciplined, long-term decisions, this episode is for you.
*Connect with Paul*Instagram: https://www.instagram.com/paulmarkmorris/TikTok: https://www.tiktok.com/@itspaulmarkmorrisYouTube: https://www.youtube.com/@paulmorrispodcastFacebook: https://www.facebook.com/paulmarkmorris
*Presented by Entrepreneur Media & Money News Network*Entrepreneur Media: https://www.entrepreneur.com/podcastsMoney News Network: https://www.moneynewsnetwork.com
Timestamps00:00 Disclaimer and Welcome
00:13 The Duplex Deal Setup
00:43 What a Five Cap Means
01:46 Cap Rates in LA Reality
02:07 5 Cap vs 6 Percent Debt
03:10 When Leverage Helps Returns
04:58 How Higher Rates Kill Yield
05:47 Why Consider This Duplex
06:25 Upside One Below Market Rents
06:44 Rent Control and Rent Bumps
07:46 Upside Two Build Two ADUs
08:37 ADU Math Doubling Income
10:19 Financing Strategy 30 Year Safety
11:52 Underwriting Rules and Upside Review
13:05 Buy and Hold vs Fund Approach
14:02 Wrap Up and Viewer Questions
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