Running numbers on a Hollywood duplex and not sure if the cash flow truly works? You are not alone. Between seasonality, insurance volatility, and neighborhood-by-neighborhood rent differences, Broward’s small multifamily math can feel slippery. In this guide, you will learn a simple, repeatable process to analyze duplex cash flow in Hollywood so you can move faster and with more confidence. Let’s dive in.
Know the Hollywood context
Hollywood sits on the Broward coast inside the Fort Lauderdale–Pompano Beach–Deerfield Beach metro. Demand is influenced by proximity to the beach, access to parking, and the condition of the units. You will also see some seasonality in turnover due to tourism-adjacent activity and winter visitors.
Short-term rental activity can push up rents in certain corridors. Before you underwrite, confirm local rules and licensing with the City of Hollywood so you do not overestimate achievable income. Check permits, licensing, and code history with the City’s Building and Code Compliance teams to avoid surprises.
- City permits and code history: review the City of Hollywood’s Building Division and Code Compliance pages for permits, violations, and use rules.
- Insurance and flood: coastal exposure can raise premiums and cash reserves. Verify the property’s FEMA flood zone and speak with insurers early.
Helpful sources:
Build reliable rent and sales comps
Your cash flow model is only as good as your comps. Start tight, then expand.
- Define your search radius: begin within 0.5 to 1 mile, then widen if inventory is thin.
- Match unit types: compare like to like on beds, baths, parking, in-unit laundry, and condition.
- Adjust for features: renovated kitchens, air conditioning type, private entrances, onsite laundry, and distance to the beach.
- Prioritize leased data: active listings can overstate rent. Cross-check with closed or confirmed leases from the MLS or local managers.
- Present three rent tiers: conservative, market, and aggressive. Use conservative for offers unless you have firm execution plans.
For baseline context, you can compare to metro-level figures:
Gather your model inputs
You will estimate four input groups: income, operating expenses, financing, and reserves. Keep notes on sources for each line item so you can update quickly.
Income inputs
- Gross scheduled rent: sum of market rents by unit size and condition; distinguish in-place vs. market.
- Other income: laundry, parking, storage, pet fees, application fees. For small properties this is usually modest, but not zero.
- Vacancy and credit loss: use a conservative 5 percent baseline for stabilized Hollywood duplexes. For weaker locations, off-season, or units needing rehab, test 8 to 12 percent.
- Lease structure: month-to-month adds flexibility but can increase turnover and make-ready costs.
Operating expenses
- Property tax: pull the most recent bill and note exemptions. If you expect a retail purchase price, reset tax to the latest level. Use the Broward County Property Appraiser to review assessments and prior bills. For millage and special assessments, cross-check with the County.
- Insurance: coastal wind and flood exposure can raise premiums. Confirm quotes with local agents. For market context, review the Florida Office of Insurance Regulation.
- Utilities: clarify what the owner pays. Water, sewer, and trash vary by municipality; verify the City’s rates if the owner is responsible.
- Repairs and maintenance: model 5 to 10 percent of effective gross income for routine upkeep, higher for older buildings.
- Turnover costs: budget cleaning, paint, and repairs per turn. A practical range is 500 to 3,000 dollars per turnover depending on condition.
- Property management: 8 to 10 percent of collected rents is common for small multifamily. Even if you self-manage, include this to benchmark your time cost.
- Admin and services: legal, accounting, pest control, landscaping, HOA or utility common area costs.
- Replacement reserves: budget annual per-unit reserves for roof, HVAC, water heaters, and exterior. A conservative range is 1,000 to 3,000 dollars per unit per year. Increase for older or coastal-exposed properties.
Financing inputs
- Loan type: conventional, FHA for owner-occupants, or DSCR/portfolio options for investors. FHA usually requires owner-occupancy for favorable terms.
- Parameters: purchase price, down payment, interest rate, amortization term, and points. Include PMI if down payment is under 20 percent on conventional loans.
- DSCR: lenders often look for 1.20 to 1.25 or higher. Keep this in mind when modeling debt.
Taxes and local registrations
- Florida has no state income tax, which helps after-tax cash flow. This does not change operating inputs.
- Owner-occupants may qualify for homestead treatment. Confirm with the County.
- To verify tax billing and payments, use Broward County’s tax pages: Broward Records, Taxes and Treasury.
Do the math: a simple model
Use this standard order of operations. Keep a consistent layout so you can spot gaps.
- Gross Scheduled Income (GSI) = market rents by unit + other income.
- Vacancy and credit loss = GSI × vacancy rate.
- Effective Gross Income (EGI) = GSI − vacancy.
- Operating Expenses = property tax + insurance + owner-paid utilities + repairs and maintenance + management + admin + reserves.
- Net Operating Income (NOI) = EGI − Operating Expenses.
- Annual Debt Service = annual principal and interest payments.
- Cash Flow Before Tax (CFBT) = NOI − Annual Debt Service.
- Cash-on-Cash Return (CoC) = CFBT ÷ Total Cash Invested.
- Cap Rate = NOI ÷ Purchase Price.
- Debt Service Coverage Ratio (DSCR) = NOI ÷ Annual Debt Service.
Hypothetical mini-model
Label your numbers clearly as hypothetical and replace with Hollywood comps, insurance quotes, and a current tax bill.
| Line item |
Amount |
| Purchase price |
700,000 |
| Units |
2 x 2-bed |
| Market rent per unit |
2,600 |
| Other income (parking, laundry) |
100 per month |
| GSI |
2 × 2,600 × 12 + 100 × 12 = 64,800 + 1,200 = 66,000 |
| Vacancy at 5 percent |
3,300 |
| EGI |
66,000 − 3,300 = 62,700 |
| Property tax (from latest bill) |
10,000 |
| Insurance (wind + flood quote) |
7,500 |
| Owner utilities/common electric |
1,200 |
| Repairs and maintenance (7 percent of EGI) |
4,389 |
| Turnover and leasing |
1,200 |
| Management at 8 percent of EGI |
5,016 |
| Admin, pest, landscaping |
1,200 |
| Replacement reserves |
3,000 |
| Total operating expenses |
33,505 |
| NOI |
62,700 − 33,505 = 29,195 |
| Financing (25 percent down) |
175,000 down |
| Loan amount |
525,000 |
| Rate and term |
6.75 percent, 30-year fixed |
| Annual debt service (approx.) |
40,956 |
| CFBT |
29,195 − 40,956 = −11,761 |
| Cap rate |
29,195 ÷ 700,000 = 4.17 percent |
| CoC (negative in this case) |
−11,761 ÷ total cash in |
| DSCR |
29,195 ÷ 40,956 = 0.71 |
What this shows: with these placeholder numbers, the deal does not cash flow with 25 percent down at the assumed rate. You would adjust price, rents, expenses, or financing. For example, a lower purchase price, stronger rents supported by verified leases, lower insurance, or owner-occupant financing could improve CoC and DSCR.
Owner-occupant vs. pure investor
- Owner-occupant: FHA or conforming loans can lower the down payment and rate. You give up one rent stream because you live in a unit. Model both cases so you see the trade-off.
- Pure investor: DSCR or conventional loans focus on NOI and DSCR. Expect lenders to target 1.20 to 1.25 DSCR or higher.
Stress test your numbers
Hollywood deals can look fine on a spreadsheet and still struggle in the first year. Pressure-test the model so you know the downside.
- Vacancy shock: raise vacancy to 8 to 12 percent and recompute CFBT and CoC. Note the month where you break even.
- Rent decline: reduce rents 5 to 10 percent or remove one unit’s rent and see how DSCR reacts.
- Insurance jump: model a 20 to 50 percent increase in premiums and verify you still have reserves.
- Tax reset: if the prior owner had exemptions, project taxes to reset at your purchase price. Confirm with the Broward County Property Appraiser and the County’s tax pages.
- Interest rate move: add 1 to 2 percent to test an adjustable or if you will refinance. Track DSCR and cash flow.
- Worst-case combo: vacancy increase plus rent dip plus higher insurance. If the deal survives, you likely have room for real-world bumps.
Red flags to catch early
- Cap rate mismatch: a price that implies a very low cap rate versus similar small multifamily without a clear value-add plan.
- Insurance uncertainty: inability to obtain quotes or a material premium jump versus prior year.
- Hidden units or code issues: unpermitted conversions, open permits, or violations. Verify through the City’s Building and Code Compliance portals.
- Flood exposure: high-risk zones without elevation certificates or prior claim history. Confirm at the FEMA Flood Map Service Center.
- Deferred capital items: roofs, HVAC, electrical panels, and plumbing that need near-term work without price concessions or repair credits.
Your step-by-step underwriting checklist
- Pull property tax history and estimate the new bill at purchase price using the Broward County Property Appraiser and the County tax pages at Records, Taxes and Treasury.
- Confirm permits, past violations, and license requirements through the City of Hollywood Building Division and Code Compliance.
- Check the flood zone and Base Flood Elevation using the FEMA Flood Map Service Center. If required, obtain a flood quote.
- Obtain insurance quotes for wind and flood. Review statewide trends at the Florida Office of Insurance Regulation.
- Assemble rent comps by unit type within 0.5 to 1 mile. Cross-check active listings with closed leases and manager insights. Use conservative rent for offers.
- Build your model with the formulas above. Include replacement reserves as an expense for conservative underwriting.
- Run stress tests. Track cap rate, CoC, and DSCR under each scenario and note the breakeven vacancy and interest rate.
When to move forward
A Hollywood duplex is worth pursuing when you can support rents with verified comps, carry insurance with room for increases, and maintain positive CFBT after conservative reserves. If DSCR holds at or above your lender’s target under light stress, you likely have an operational cushion.
If you want a second set of eyes, I can help you validate rents, estimate insurance, and source on- and off-market small multifamily opportunities in Broward and Miami-Dade. Let’s run the numbers together and move quickly when the deal is right.
Ready to analyze your next duplex or line up off-market options? Reach out to me at Eric Edward Exhibits to schedule a free consultation.
FAQs
What vacancy rate should I model for a Hollywood duplex?
- For stabilized units in good condition, use 5 percent as a baseline and test 8 to 12 percent for seasonality, weaker locations, or if you expect turnover.
How do I estimate property tax for a new purchase in Broward?
- Pull the latest bill from the Broward County Property Appraiser and project a reset at your purchase price, then confirm millage and assessments through County tax pages.
How can I check flood risk for a Hollywood property?
- Enter the address in the FEMA Flood Map Service Center to see the flood zone and Base Flood Elevation and then obtain a flood insurance quote if required.
What is a reasonable cash-on-cash target for small multifamily?
- Targets vary by risk and financing, but many value-focused investors aim for 8 to 12 percent CoC with conservative vacancy and reserve assumptions.
Should I include replacement reserves as an expense in my model?
- Yes for conservative underwriting; budget 1,000 to 3,000 dollars per unit per year and adjust for age, roof condition, and coastal exposure.
How do owner-occupied loans change the analysis?
- Owner-occupancy can reduce down payment and rate, but you give up one rent stream; model both scenarios to see CoC, DSCR, and cash flow trade-offs.
