A little worried about house i'm closing on tomorrow- should I be

Buying & Selling Real Estate
10yFollow

A little worried about house i'm closing on tomorrow- should I be

Brendan Markle
Bensalem, PA · Member since 2016 · 96 posts · 52 votes

my fiancee and I just bought an investment property in the port richmond section of Philadelphia. Its not the best area right now, but is likely to appreciate and I found what I thought was a pretty decent property. 75k duplex, 625 rent from each side so 1250 a month. the mortgage is going to be 400 a month so after accounting for vacancy and maintenance we should be cash flowing 650-700 a month.

Closing is tomorrow. The inspection and appraisal went fine. What were worried about - We had trouble getting the first floor tenant to answer the door twice so far- once when we initially came to look at the house before we even put an offer in, and tonight when we went over to do the final walkthrough. Tonight we also learned that the first floor tenant just switched phones and the landlord didnt have his number. Basically we saw the second floor, which was 100 percent fine, but didn't see the first floor. Should we be worried about this? It was fine during the inspection, and the tenant was very accommodating and seemed like a decent guy according to the inspector.

One other thing- I have a copy of the leases but no proof that the tenants have been paying rent. I have no worries about the second floor tenant, but was a little worried about the first. Apparently its pretty common not to see proof of payments with duplexes. I'm just looking for any advice/opinions from you guys.

0Reply
27 views

4 Replies

Jump to latestLatest
  • David Hedges
    Investor · Crown Point, IN · Member since 2014 · 177 posts · 84 votes
    10y

    was the seller able to provide a copy of their schedule E?

    you can get the income vs expense for the property from that.

    If your closing tomorrow, I'm not sure there is much you can do to ease yourself about the tenant on the first floor, though if they are a problem tenant and breach the lease, you may get to learn the eviction process sooner rather than later. 

    0Reply
  • Mike Hanneman
    Investor · Coeur d'Alene, ID · Member since 2016 · 551 posts · 218 votes
    10y

    It's too late to worry, as long as you got the property for what you believe is a good deal is what matters. Don't let the current tenants detour you as you can always get another one. Follow some of the guidlines when dealing with a non-paying tenant if it comes down to that and move on.

    0Reply
  • Trevor Ewen
    Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
    10y

    @Brendan Markle

    The feeling of nervousness is pretty normal in these cases. Here is what I can say:

    + I think your intuition on Port Richmond is good. The area is primed for growth, love the neighborhood, and I have several friends from college who have recently 'discovered' it. Creative types and the like, usually a good thing for property values.

    - $625 / unit is pretty low for Philly. The property is either vastly under market (great opportunity for you), or these tenants are at the low-end of the neighborhood. This is not always a problem, but most experienced landlords will tell you that you rarely want to be at the bottom of a local market.

    Given where the area is headed, I would consider the possibility of value-adding your way into a new tenant class. Small units can still be very attractive to A,B tenants if they are very nice. Alternatively, you could run it as a flip and see where that gets you.

    If you PM me the address I can reach out to my friends over there and see what they think of the property. They've been in the neighborhood for awhile.

    0Reply
  • Scott C.
    Philadelphia, PA · Member since 2016 · 142 posts · 26 votes
    10y

    Port Richmond is a great area to be invested.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free