Finally closed on our first multi-family, check out our numbers
My wife and I closed on our first duplex today. I say finally because our offer was accepted about 6 weeks ago and closing ended up being pushed back an entire week due to an estate being dismantled and causing all three children of the original owner(who all live out of state) having to sign individually. But, it was worth the wait I do believe.
Originally listed for 120k the listing agent was having difficulty getting into the south unit due to uncooperative tenants. Once access was gained the state of the unit was apparently less than acceptable. The tenants were evicted, the unit was cleared out and remodeling had begun. This was over a 4-5 month time period. When my wife and I looked at the property a majority of the remodeling had been completed in this unit and the current owners had agreed with the tenant in the north unit to also do new tile in his kitchen and bathroom, new counter tops, and a new deck on both units without increasing the list price. We negotiated a sale price 108k with all projects completed. The completed remodeling helped the appraisal came back at 136k.
We were able to do 80% LTV over 25 years at 4.75%. At closing today, our earnest funds($1000) and the seller tax proration($3039) covered everything for closing and we walked out with a check for $119. Both units are currently rented at $700/mo and we signed new 1 year leases today as well as collecting all of June's rent with our first mortgage payment of $608 due next month. The $700 deposits for each unit was also transferred to us today.
We will have property taxes of $3400 due in September but I am quite pleased with how this deal ended up working out.