First deal under contract
Hi all,
I've been reading BP for a while (lurking) and learning and am curently under contract on my first deal. I just wanted to share this on BP.
It's a duplex in Houston, 3bd/2br on each side. The neighboorhood is what I would call 'transitional'. The current owner paid $65k and says he put put $6k of rehab work into it. The units are in nice shape inside. My first offer of $72k was accepted, but then I found out during inspection that there is deflection in the foundation which will have to be repaired at some point (the engineer estimated the drainage work + relevelling would run somewhere around 15k). I changed my offer because of this, down to $60k. The seller initially hesitated but, given the facts, eventually accepted.
Both units are already rented, each collecting $600/month. Tenants have to take care of yardwork and minor maintenance, according to the lease at least. The rent is well below market as identical units one street over rent for around $700-$750. Not sure why the owner rented out so low - he told me his reasoning was that a lower rent is less likely to attract troublemaker tenants - not sure of the logic on that, but it is what it is for now.
Phil