Buy First Property - Duplex for $41K?

Question

Hi All,

I am looking to buy my first real estate property, a rental property. I found a duplex for $41,000. The owner is an out of town investor that bought properties, fixed and rented. Professionally managed. The rent is $600 per unit ($1200 total) with tenants who've lived there many years. The other houses in the neighborhood seem to be worth $60-$80K. As an individual with limited real estate investing knowledge, this seems solid but wanted to ask.

Thanks,

Nick

Nick Robinson · Answer

Thank you  for all the responses. I have reached out to the seller for more information and wI'll do more rsearch myself.

The sellers ad mentioned that they no longer live in the city and are trying to sell their properties.

I am somewhat familiar with the area - grew up in the city. It is near a "not so good" part of town, definitely not the worse, but is in a pocket within the city where the neighborhood is actually pretty decent compared to the adjacent areas.

Jacob Sampson · Answer

Based on the bit of info provided the numbers look solid.  Even solid enough that I would be looking for a gotcha.  I'm assuming this may be a C or worse area?

Dante Pirouz · Answer

Check on what capex is needed. Also check crime in the area (I use Trulia for that).  That may explain the price.

Brian Lacey · Answer

My big questions would be: Why are they selling (hoping for a motivated seller), and why is this property a fraction of the other properties in the area, and what are the comparable duplexes selling for?

Get those 3 answered, and you'll get a better idea of how to approach the deal, and ought to give you an idea of your exit strategies.

Secure your downside (risk), know how to build your upside (equity).