I mean...I just get this feeling that a property in a city that is safer than only 4% of the cities in the entire country could definitely fall in the D category of "war zone." Great cash flow potential but you're taking a big risk in a lot of other ways that may not make the purchase worth it. Good job on researching the market, but in addition to what @Ken P. said, you have a lot to think on before taking the dive here.

Potential rent is just that, potential. What are other units in the area actually renting for? If comparable units are not easily renting for $750, then you're buying on a promise that may not be fulfilled any time soon. If you're only renting for $650/side, then you're down to $350 cash flow, and after 10% management fee (which is what you'll likely pay for a single property under management) you're not left with much for the risk you're taking. Also, I don't see any mention of the condition of the house. Unless it has been recently rehabbed and has new everything, you need to be setting aside significant reserves for the eventual roof replacement, driveway repairs, HVAC, etc. Also, you need to have a line item in your budget for repairs, and for lost rent. The good thing about a duplex or any multifamily building for that matter is that you're only out some of the rent, not everything, if one unit goes empty. It sounds like this would be your first rental. Congrats on taking the first steps to get into the game. To make sure you stay in the game long term, my recommendation is to make sure your first deal is close as can be to being a sure winner financially and also in terms of stress level, which doesn't sound like would be the case with this borderline war zone property. If funds are tight, or even if they aren't, look up and read about the BRRRR strategy here on Biggerpockets, and see if you can find a home in a solid middle class area to apply the technique to.

@Mohan Dag, Seems like good cash flow. Plenty to cover management. How "less safe" is it?

Updated over 9 years ago on 09/19/2016. Most recent reply

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Mohan DagPoster

Charlotte, NC

Buying & Selling Real Estate

Buy or not?

Mohan DagPoster

Charlotte, NC

Posted September 19, 2016 07:19

Hi, I came across a duplex in Monroe, NC. The asking price is 105k. PITI: 950 Potential Rent: 1500/month. ( 750 on each side) One tenant that is in pays 650 now. But the location is grade C. It is one of the less safer areas near Monroe downtown. Though I am planning to give it to property management so I don't have to deal with the tenants, I am skeptical to buy as It is my first investment property. Anyone share your thoughts?

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