Red Flag Advice
Looking at a fully renovated duplex. It was purchased two years ago for more than the current list price. Property is occupied. Two units. Renovation was done in 2020. Listing claims it's turnkey.
Rents total $2,500 per month. Estimated vacancy used for testing is 12%. Operating expense model includes management, maintenance, reserves, taxes, and insurance. DSCR at full P&I sits at 1.17. IO brings it to 1.26. That clears the DSCR threshold, but margin is thin.
Cash-on-cash return models high with low down, but that only works if tenant performance is stable and systems hold up. No interior access yet. No lease verification. No income proof. Seller submitted documentation for Phase 1 of a local tax abatement process, but no indication if it was approved.
They bought this property for more than it's listed for now. That puts the motivation into question. No communication with agent or seller yet. No disclosures reviewed. I haven't pulled title yet.
Posting this to get perspective. When a seller exits below their entry price after two years, what’s your read? How do you approach deals that appear solid on surface but show exit urgency from the current owner?