I have come across a deal which seems to be good but want to get everyones opinion and if they have dealt with the following:
The asking price is $265,000, I am offering $245,000.
it is a duplex, the 2/1 rents for $1350, and the 1/1 rents for $900. It has an oversized lot which I can rent to an RV or boat.
The roof is pretty much at its age, 20 years, and would cost about 7k to replace. It looks good now, no leaks so instead of getting it replaced as part of deal, I am asking for deduction on price. Also, to make it livable, I would have to add about 6k in each one. it has the box AC units, and look pretty old so I want to change them to the wall mounted ones.
In the rent includes garbage and sewer, tenant would pay for electric.
It has really bad windows as well, which would have to be fixed or replaced.
Updated 6 months ago
QUESTION: would you ask the two tenants to be removed prior to selling?
doesn't sound like a deal to me
personally I wouldn’t ask for the tenants to be moved, that’s guaranteed income.
Need more info:
CASH or Finance?
Are the tenants current with on time payments?
More details will garner better advice... imo
Thanks for the feedback.
Purchase price: 245,000
FHA Loan - 3.5% down, 4.78% ARV loan.
Tenants are currently on time payments, I am evicting the 900/m for myself as requirement for FHA.
My problem is my numbers arent adding up:
2/1 = +$1350
1/1 = +$900
Electric - Tenant
W/S - $160
Capital ex (10%): 225
NOI = $50
** It is an oversized lot and I am thinking about putting an RV/ Boat there. Maybe +$300. no HOA.
**It is in a very high up and coming area of town, 1.5 miles from beach and .5 mile from town center/ social area.
PLEASE GIVE ME OPINIONS!!!!!! What price would make this deal work?
Originally posted by @Jason DiClemente :
You can't simply "evict" a tenant just because you want to live there. When you buy the property, you are required to uphold the terms of the leases that are in effect. For this property to be a cash flowing deal for me, I would have to offer around $185k. The taxes are high so it would have to well exceed the "1% rule" to provide a good return on my investment.
They are on a month to month lease with no contract.
You can’t expect a property to cash flow well with 96.5% LTV financing, with MIP.
I would screen the current tenants if they are on a month to month before continuing any leasing arraignments with them. I never trust the judgement of a previous landlord regardless if they pay on time
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