Needs updating do you buy it.

7 Replies

I am looking at a property, 69,900

2 unit 2 /1.5 rents 725 1/1 over a garage rents for 525.

Says units need updating.

It would cash flow around 600 a month.

At what point is updating both units to expansive. The 2/1 is top of the market here, maybe 600 for the 1/1.

Would this be a deal if you need to update kitchen and bath etc, that would set you back a few couple of years. Just thoughts I know in 2 years gain equity.

Something to jump on?

@Jon Sirkin

You should put all of the numbers into the rental calculator and share a link to it here. Otherwise, it's sort of hard for us to judge without seeing more information.

Is it a legal duplex or is it a house with a mother in law apartment? How old and dumpy is it? How much money would you need to put in to fix up on day one?

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The one over the garage would bother me code wise unless it has the upgraded fire proofing required for apartments above garages. Also does it have all separate utilities & how much are water costs.

But as others said it's marginal & any rehab will cut into cash flow for awhile. The hopes for higher rents may not be possible to justify the rehab $$$.

I think it just depends on what your plan is. Are there renters currently in it, and are you willing/able to kick them out to remodel? Does it need to be done to increase rents? How long are the current leases for? There can be a lot of variables that will make many decisions for you. If there are renters there and they've been there for a long time, you might just be able to wait on the updates for now, as long as they aren't safety issues.

Every investor has different goals so this may suit you with the risks associated, but I tend to stay away from those SFRs that have been modified into a pseudo-duplex. Best of luck!

Cheers,

Brian