Buying my first Duplex, is it a good idea?

Question

Hello,

I am starting my first adventure with a 1975 Duplex. One story, mirrored 2 Bed 1 Bath Units.
This property is in Norfolk, Virginia and is being listed for $183,500. Each side is currently being rented for $750.

What amount should my offer be for? ( I wanted to offer $160k)Would renovations be a good ROI for both increasing home value and to raise rent?

Any general advice for me before going forward?

Erica Rich · Answer

Yes, Norfolk is a fantastic place to purchase your first duplex.... However, your rental comps of a thousand a month per side sound a little high and I'm wondering where you got them? Because only if they're in certain areas like Meadowbrook or say Larchmont might that happen.

Vaughn Smith · Answer

@Shane Welch what part of Norfolk is the property in? The purchase price for the area doesn't sound like a deal as it appears a bit high. I would partner with a realtor for a better look at sale and rental comps then start analyzing a ton of deals so that you know what a good one looks like.

Janine Badic · Answer

When you say prices are $1k-$1.5k/ mo in the area are you comparing that to all types of units (single family homes, apartment complexes, duplexes)? I have never seen a 1975 duplex in Norfolk rent for $1500/mo.... $750 all day long but I think even a $1000 maybe hard to fetch on a 2/1. For me the numbers don't work but if you feel that they work for you, go for it. I would recommend that you use what the rent is currently $750 (since theoretically you should at least get that in the future) , and if the numbers meet your criteria, then you have yourself a winner.

Krissie Cole · Answer

Hi Shane,

We look in Norfolk for closer to 130k for rent at $750 on both sides with no major renovation expenses needed.  Numbers may work if you are in the right areas of norfolk to pull higher rents.

Good luck!

Tim Lemons · Answer

@Shane Welch I'm a new investor in this area as well. How's this property working out for you?

Jay Helms · Answer

Seems like you need to spend some time defining your WHY - as your why you want to invest in real estate. Once you have your WHY defined, you establish goals and thus investing criteria. Your WHY, goals, and investing criteria all support one another to give you guidance on potential acquisitions and if you should or should not buy them.  Spend some time defining your WHY.

And check out my 10 Step Guide to Buying and Holding a Small Multi-Family Rental Property available on the BP eBook Fileplace.

Shane Welch · Answer

Properties in this area are renting for $1k-1.5k on average.   This house is actually in decent condition and could easily get to 1k each side without any renovations.  I will be living in one side and the other tenant will be moving out in November.

I checked for expenses, Currently the net income (after Morg,Ins,Tax, Prop Manager, CapEx,Water) I am left with $200 a month.  But as I stated I would be able to get it to $1k eventually.

Buying my first Duplex, is it a good idea?

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