First Duplex, 5 Months In
6 months ago I was working across a nice duplex with a new "For Sale" sign posted on it. I keep a very close eye on my local market and have been wanting to get into a multifamily property. My wife and I ran the numbers and set a price we would pay for the property. The property wasn't on the market yet and we didn't know the price. We set a number at $50,000 more than the asking price, but the units ended up being smaller than expected. Here is the rest of the story...
Closed on my first duplex 5 months ago in my small resort community. Purchase price of $372,500 and put 25% down. Both units are 1 bedroom and a loft with 2 bathrooms. These units sit atop 4 one car garages, 3 of them with 75 sq ft storage areas behind, the 4th garage has a coin-op laundry room where the storage area would be, accessible from the outside.
Minimal work needed to be done; new faucets, light fixtures, carpet cleaning, cleaning garages, door handles, and garage locks. We also replaced shower heads and all toilets, but were fully reimbursed by our water company (almost $1k savings!)
Current rents are $1250 for the new tenant, $1050 (up from $1k and below market rent) for the existing tenant. These units both come with a one car garage, we rent the other two for $175 for the larger garage and $150 for the smaller.
Other monthly profits are coin op laundry $20-40 a month, although at a loss due to inefficient machines and very high utility costs. I also receive $30 for storage of a trailer on the back dirt lot for the summer months.
My expenses on the property are mortgage, tax, insurance, $40 a month in water, $40 a month in electricity, $20 a month trash, and $900 a year snow removal.
I am profiting a few hundred a month currently. Plans for the future include removing coin-op laundry and converting the space into storage that would rent for $50-$75. I would add laundry to each individual unit with partial refund on the washing machines from my water company. Both units will need new carpet when the current tenants leave. Would also like to upgraded the bathrooms and kitchens in the further future. I will also be increasing rents 5% a year for the below market tenant
So far so good, I live very close to the property and drive by it almost daily, we do most of our own repairs and manage the property with my wife.
Let me know what you think or if you have any questions!