How Can a College Dropout Buy a Duplex?

4 Replies

Hello fellow BP members! I need YOUR help!

The owner of the duplex I currently live in is going to be selling the property for $370k in Sparks, NV. I don't know much about real estate and how I would go about purchasing, so I was wondering if anyone could impart to me any knowledge I should know prior to doing the deal. Thank you all! I am hoping this may turn out to be a good opportunity and I'm digging to find out if it is.

Property information: 

Multi-family (Built 1965)

2,052sqft with a 6,795 sqft lot size

5 beds 2 baths 

Kitchen includes fridge, dishwasher, and electric stove

Washer/Dryer in Garage

Fenced Yard and front is landscaped

Updated almost 3 years ago

Knowingly, an FHA loan may be possible if I come up with the %3.5. If I ask family members for money I’d have to season the account for at least 2-3 months. The one issue is I don’t know how to run the numbers accurately even with a calculator!

I don't know your market but that seems high.  what are the average home prices in your area. ok so on to the question at hand, assuming that is a fair market price. should you buy it? the first few things you need to know are:

what is the average rental rate for that size unit?

what will your mortgage payment be?

what are your goals?

obviously you are trying to house hack....but are you just trying to cover the cost of the loan or reduce your living expenses or actually make profit? each of those questions will give you a different strategy when is comes to buying owner occupied multifamily.  

what is your current rent rate? 

can you afford the mortgage?

what work does the home need?

other costs to consider :

-Taxes, Insurance, Repair cost, Vacancy rate, Capex,

respond with some numbers and i can help you better evaluate based on your goals

Originally posted by @David D'Errico :

I don't know your market but that seems high.  what are the average home prices in your area. ok so on to the question at hand, assuming that is a fair market price. should you buy it? the first few things you need to know are:

what is the average rental rate for that size unit?  

For this size, the average rental rate is $1800. Majority of the homes in this area are duplexes.

what will your mortgage payment be?

Assuming 20% down around $74,000, the mortgage would be $1,982/mo

what are your goals?

The goal is to actually make a profit, but with the look of it the cost of rehabbing the entire place it may not be plausible. 

obviously you are trying to house hack....but are you just trying to cover the cost of the loan or reduce your living expenses or actually make profit? each of those questions will give you a different strategy when is comes to buying owner occupied multifamily.  

what is your current rent rate?

Currently, it is $1,050 and the other side of the duplex is renting at $950

can you afford the mortgage?

I can not afford the mortgage

what work does the home need? 

If it is going to be worth anything on the market...

Complete carpet replacement (dog stains), Electrical rewiring outside and inside the house (issues with outlets and circuit breaker), possibly adding central air, Kitchen and bath remodel, 

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