Just looking for some feedback on a deal I offered on over the weekend.
I've been in search of really any deal I could find that would cashflow a minimum of $350/mo out of that gate after ALL expenses (management fee, maintenance, insurance, lawn/snow, P&I).
Without having time to find off market deals, I didn't really expect to find any such thing on the MLS. One popped up this weekend but didn't show any pictures (which is usually a sign). But, I figured maybe I'd be the rush if I took a look before they completed the listing. So I scheduled a showing the next morning.
The place looked fine for a rental duplex. It is a 1986 build and doesn't seem to be updated since then. Structurally, everything looks good. I estimate the roof to be halfway through useful life. A/C and furnaces are original, so they'll need to be replaced at some point.
One side is 2/1 the other is 3/1. Side one is currently rented for $800, side two is currently at $1000.
While I was there, two other parties showed up to see the place so I figured (like many listings these days) they'd get a full price offer from someone.
They were asking $161k and I offered $150k. They accepted, no counter.
I'll be putting 20% down and getting conventional financing for the rest provided the inspections don't turn anything up.
Side 2 has egress window in basement ready for 3rd bedroom to be framed and finished. Both basements are plumbed for bathrooms.
Just looking for a quick, "Hey nice deal!" Or (more importantly), "Are you kidding! Why would you do that with your money!" (with some justification that I haven't thought of.)
Thanks for taking the time.
Seems fine. Any idea how long the tenants have been there and do those rents seem reasonable for the neighborhood?
If nothing significant has been done since 1986, I would suppose that would be the majority of your upcoming expenses over the course of the next 5-10 years. I might try to negotiate that a bit through the inspection period.
Seems good so far though.
Sounds awesome. Congrats! Do you already have a property manager in place that you use? Is it an area with a lot of renters? Either way sounds like you ran the numbers and this will be a great situation for you.
Kristina, tenants are not long term, 1 year for one and the other is month to month and has been there for 6 months. Rents (according to rentometer) are a bit low but, given that it hasn't been updated they are probably about where they should be.
Yes, there will be a few reapirs to be expected and hopefully I can knock a few bucks off before closing.
Thanks for the reply.
Craig - Yes, I do have a PM. I already own another duplex and two SF. The whole street is a rental district.
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