Rental Property Investor · Wichita Falls, TX · Member since 2020 · 54 posts · 22 votes
Ok, so I'm looking into investing in this duplex using an FHA loan. The property is $119,500 after financing my Mortage should be around $900.
I’ll live in one side for a year then rent it out. The property is in Lawton Ok (Military town). I’m a little nervous but I really want to do the deal. But is this deal worth it? Both the units can rent 600 a month. With a little rehab I would up it to 650. I’m just nervous is it worth it?
Once you account for Capex, maintenance, management, vacancy, etc, there won't be much, if any, money left for cash flow. Might even be negative cash flow at that point. Based off the info provided, it doesn't seem to be a good deal.
@Kiera Underwood the return starting out won’t be much that was my biggest thing. But I’m thinking more long term more than anything. I think I’m just nervous also.
I commend you for the self-awareness. What are you nervous about?
Just nervous about the process. What if I’m a bad landlord. Big repair expenses, bad tenants, things like that. But I’m anxious to get started and hopefully this is the start of something great.
Hey Christian, what part of Lawton are you looking into? My dad was field artillery, and I've still got family there so I am pretty familiar with the town. If you need help with some contacts, I can point you in the right direction.
1. Bad landlord - don't tell your tenants that you own it. Tell them the owner lives out of state and you manage for him. That way everytime anything is asked you can say you have to ask the owner and it gives you time to think/research. Also, it makes saying no easier if it's not coming from you!
2. repair expenses - if you don't have a solid amount of capex reserves you can protect yourself by purchasing a home warranty. For a duplex this is around 700/year. This will cover any major mechanical that goes out as well as make many repair requests only cost $70 total for the service call and actual repair. If you'd rather not pay that annual expense I can send you the expected age and est cost of major mechanicals to help you develop a capex budget!
3. Bad tenants are scary but if you do a walk through before they move in that clearly identifies the condition of everything and have them sign off on it, they will be legally responsible for any damages. I like the strategy of doing evals 2 times per year that allow the tenant to pay for any damages they've caused so you're not having to ask for it at the end. Also if they need to be evicted it's as easy as setting a court date with a notification that if they can't pay late fees, court fees and full rent at that date they will be evicted!
@Christian Cummings and talk about cost of living! If you make an average salary here you can be incredibly comfortable. I say I'll never leave, but never say never!!