Looking at a deal on a duplex that I would owner occupy - there are very few multifamily properties available in my area currently and all seem to have what I think are inflated list prices.
1,976 sq. ft. 2 bed, 2 bath per unit duplex built in 1969, 2 car garage.
List Price $137,750
Current Tax Assessed Value $100,800 (prev. $116,000 average)
Located in a desirable neighborhood with SFH and MFH mix close to an elementary school.
Gross Income $14,400 annually (verified currently getting $600 per side rent). Their listed expenses $3150 annually - $3400 annual expenses calculated based on 50% rule.
Taxes - $1600 per year, Insurance $725 per year
Mortgage - 5% down payment at 4.25%, closing costs around $900.
$80,000 - 100,000 equity in current primary residence.
Current tenants month to month, looking to leave. I have prescreened a great tenant who I would feel more than comfortable living next to (currently babysits my kids).
Property has worn roof, outdated/damaged siding on both garage and house and needs a new front door. Previously had sewer backup issues, but were supposedly resolved and new flooring in lower unit installed.
Max rent for comps in area $800 per unit per month.
Offered $109,000 - seller rejected, seems to be moderate amount of interest in property - has been listed about 6 months.
Recommendations on purchase price? Should I go up a little bit or run away and wait?
Located in Eastern Iowa, I appreciate any feedback!
Well it's a 1% at $120,000, but with all of the issues you mentioned, I wouldn't feel comfortable bidding that place any higher, unless you make an offer with full contingencies and you do a thorough inspection. Being that it's been on the market for 6 months, I think time is on your side.
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