First rental property investment

Rental Property Investor · Winchester, VA · Member since 2019 · 50 posts · 16 votes

Hello to all my BiggerPockets fam.

So I think I’ve come across a pretty good deal. I was hoping to get some insight from my BiggerPockets family.

This property is a duplex in Portsmouth, VA. Asking price is $90,000 BUT it's been on the market since 2018. Red flag I know. I've analyzed using the BiggerPockets rental calculator and it's showing fantastic numbers. The comps around the area are showing anywhere from 150-170 and the rents are at the lowest 750 to a high of 1195 (for both units after its fixed would net nearly 1100 a month. I still have a good bit of due diligence to do & I need to actually see the property and what's going on on the inside. (They did not show any inside pictures) another red flag.

Any insight would be great. Thank you.

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William Taylor

Member since 2019 · 16 posts · 10 votes

@Thomas Baylor

Hey Thomas! I actually bought a home for $40k several months ago and we are just finishing up rehab. Same deal with ours— long time on the market, no interior pictures, etc. I thought maybe I could offer a bit of advice.

It sounds like this property might need some significant repairs. The rental we bought was about an hour away from us, which turned out to be a huge PITA. There are so many barriers you have to consider, and I just want to point some of them out:

- how do you get on site to let contractors in to give estimates? (We used a lockbox, but a lot of contractors want to walk the property)

- how do you stop squatters/break ins? (We had a few during the first few months)

- what happens if there’s a water line burst and no one is around to check on things for a few days? (Also happened to us)

- how do you check on quality of work being done? You should be going down to check things out at LEAST every other week.

Now don’t get me wrong. We’re on the other side of this finishing up, but it has been just an awful ride to get here. We will cash flow >$1k/mo on this fourplex, but knowing what I do now and how much time commitment it takes (even when hiring things out), I would not have done it as my first investment property.

You might be willing to take it on, but I just wanted to give you some perspective from someone who has just gone through it. Happy to answer any questions you have.

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Daniel Ferster
Flipper/Rehabber · Portsmouth, VA · Member since 2016 · 46 posts · 5 votes
6y
@Thomas Baylor
That area where the property your talking about is pretty rough. Portsmouth is hit and miss. If you’re not familiar you might want to target a different city.
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Tom Wagner
Real Estate Agent · Minneapolis · Member since 2019 · 338 posts · 219 votes
6y
Originally posted by @Thomas Baylor:
Hello to all my BiggerPockets fam.
So I think I’ve come across a pretty good deal. I was hoping to get some insight from my BiggerPockets family.
This property is a duplex in Portsmouth, VA. Asking price is $90,000 BUT it's been on the market since 2018. Red flag I know. I've analyzed using the BiggerPockets rental calculator and it's showing fantastic numbers. The comps around the area are showing anywhere from 150-170 and the rents are at the lowest 750 to a high of 1195 (for both units after its fixed would net nearly 1100 a month. I still have a good bit of due diligence to do & I need to actually see the property and what's going on on the inside. (They did not show any inside pictures) another red flag.
Any insight would be great. Thank you.

I think a lot of good insight has been added in this thread. I'll add one thing -- If a property has been on the MLS for two years and comps are 2x the asking price, something is off. Run away and run fast.
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Patti RobertsonBusiness Member
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Thomas Baylor As both a landlord and property manager who does a lot of business in Portsmouth, I’d say this property is not a good option for a brand new investor. There are a lot of reasons.

1) Looks like there have been 5 contracts that have fallen through on this one. I have not been inside, but the way it is marketed makes me think it is a tear down. It is being sold as is and there isn’t a single interior photo in the listing. My guess is it needs to be gutted to the core or torn down.

2) While I do own and manage in Portsmouth, it's now in my "no buy" zone, because of the ridiculous politics going on in the city. Join the Facebook Group called Portsmouth Political Pulse (va) and Portsmouth VA Police/Fire Scanner Group to get a handle on the insanity happening in the city. Corruption is abound. Between the mayor, city council, city manager, and police chief, there is always someone battling. Here are a couple of examples.

https://pilotonline.com/news/g...

https://www.13newsnow.com/arti...

3) Prentis Park is gang, prostitution, and drug ridden. Lincoln St is a thorough fare. Come drive down the street at 10pm and see how safe you feel. (I actually would not advise this.). The rule I have for my office is to be out of this neighborhood by 3pm. lI did a search for Lincoln St in the scanner group and these three incidents were reports of gunshots since Feb. If you were to search for surrounding streets you would find many more.

4) Vacant buildings in this neighborhood are very frequently being broken into for shelter for the homeless and a place for drug use or prostitution. I literally sold a house of mine not far from there because we could not keep people out of it so we could fix it up between tenants. We really tried. 4 times we had the cops remove people, and they knew them by name every time. Different people, but the same problems. We finally boarded the entire house and sold it to be rid of the problem.

You know that old saying, if it looks too good to be true... In order to get a decent rental in our market right now you really have to be willing to spend 100 times rents or so.
757-472-2547
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