I'm new to investing world, I'm very interested in buying a duplex in our area. Problem is I don't have much to put down.
I do know someone willing to become part of an opportunity, just wondering how to go about it.
I have found a duplex for $115k. Needs about 30k in rehab. It then would be worth 150-160. Rents in area are between 825-900 a unit so 1650- 1800 a month total. Taxes are 3400.
I found someone that has 50k that is wanting to invest. I was thinking I could use that money for down payment and rehab, then finance the rest and that would make my total monthly payment around 900. My plan would be to keep it long term. Does this sound like a good investment, and how do I go about making payments to the investor? Or paying him?or do I not pay him and split profits at a different time?
Rental Property Investor · Columbia, MO · Member since 2018 · 2 posts · 2 votes
8y
If those numbers are correct there isn't much equity in this property. I could see how the loan could be beneficial, but the numbers just doesn't work as an investment.
115k+30k=145k
160k-145k=15k
Just not a lot of room, and also you would structure the loan and pay back interest.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
8y
@James J. Depends on what the investor is looking for - monthly payments? Equity?
I did a similar deal to this once where the investor put in the down payment, about $60k, and I put the loan in my name, about $250k. I was able to get my foot in the door and we agreed to split everything 50/50 going forward. It worked fine for us.
Congrats for stepping into the investing world! If you have someone that is willing to be involved in terms of providing you $50k for your down payment/rehab, you may be able to structure things differently. If you get a hard money loan you'll be putting do 10% for the purchase price and receiving 100% of the rehab cost. It sounds like it could be a good investment, but you will need to work out payments to your investor as many times investors want an overall percentage and or they'll split everything 50/50.
Rental Property Investor · Columbia, MO · Member since 2018 · 2 posts · 2 votes
8y
If those numbers are correct there isn't much equity in this property. I could see how the loan could be beneficial, but the numbers just doesn't work as an investment.
115k+30k=145k
160k-145k=15k
Just not a lot of room, and also you would structure the loan and pay back interest.