Excited about my new project
Here are the nuts and bolts of it..... Scheduled to close in <2 weeks.
Duplex in the Germantown neighborhood on Philadelphia.
Purchase price 160k
Just appraised for 215k.
Needs about 40-45k in rehab work total. Mostly cosmetics and exterior work.
My estimated ARV is 250-260. I think that is conservative but comps are hard to come by.
Apt 1 should rent for 800-900.
Apt 2 should get 1200.
My partner is covering the acquisition costs using a conventional loan (25% down) in my name. Just under 50k.
I am covering the renovation costs.
I am responsible for managing the rehab, placing tenants, and ongoing property management.
The plan is to split the monthly cash flow once the property is stabilized and hold it for 1-3 years. Then sell after the 1 year mark to avoid the ordinary income tax rate. The backup exit plan would be to hold for a longer term.
For those of you in other markets these numbers won't look great. But for a good neighborhood in Philadelphia it is pretty hard to find a property that meets the 1% rule these days... So I'm pumped!