I finally found a duplex that I would like to make my first real estate deal. Here is the situation,
I know someone who is planning on selling two duplex units in the near future. The only reason he is selling is because ht is getting to the point where he wants to start slowing down and enjoy life (aka retirement).
Each duplex is currently appraised at $165k. My plan is to use an FHA loan to finance one duplex and in a year or so move into the other with another low down payment loan. I have already spoke with a loan agent and was told I would have no issue qualifying for the loan. Only thing is I have to wait until sometime between Nov-Jan before I can (i have to be at my job for so many months before they can use my monthly bonus to qualify.) One unit on one of the building is currently vacant and ready to move in.
The current rent is $795.
The current offer given to me by the seller is....
I can rent out the vacant unit starting in Aug w/ no security deposit at $700/month. I can rent at this rate until I can secure my loan. The sale price is at $160k and he has agreed to pay closing costs.
What I would like to do is somehow incorporate managing the property to bring the price down. If i were to manage both duplex buildings, how much would that be worth in terms of purchase price? I would also incorporate taking care of lawn maintenance (which he currently pays about $70/month for. So, with that, I am thinking of making a counter offer of:
-Monthly rent of $600 until I secure my loan.
-Purchase price of $148k w/ the intent of buying the second duplex at the same price after a year or so.
- Seller pays closing costs.
- I would actively manage both duplex units and take care of lawn maintenance.
What do you think?
to cheap? to much? Just right?
Also, duplex is not currently listed so there is no realtor involved.
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