Anyone Interested in Buying a (sorta) Duplex? $55,000

[Brandon Turner]

Hey folks,

Anyone interested in a (sorta) Duplex? (or if you just like playing with the numbers and wanna follow along)

Here's the (not so quick) story -

A single family 3-1 house in my nice little town of Montesano was listed at $60k (now at $48k) for a while, a bank repo. It needs paint, carpet, landscaping, and maybe some new cabinets and such to get it rent ready. Next door, and included with the property, is a small single family house that needs to be gutted. However, that little house is LITTLE. Like, 300 sq ft little. Kinda strange, kinda cool. The little house next door, I think is the kicker - cause it wasn't listed with the house. The bank called it an "out building." I don't think they realized it was an actual apartment. I think I got a steal.

So my plan was to buy it, spend $10k on the big house getting it rent ready, and spend another 10-15k turning the little house into a "studio" house. New drywall, flooring, bathroom fixtures, a couple walls, etc. Essentially it will be like a hotel room. Rent around $400 per month, maybe $500 depending on how nice it is. Not a lot of comps around for a studio house but a cool idea, I think.

So in the spirit of full transparency - I have it under contract for $45,000. I'm was going to do the work and get it ready to rent out, but if I can make a profit right now - I will. ;) So, I'm listing it here for $55,000 - cash only, gotta close in 2 weeks. (Cause I'd be doing a double closing.) I need some cash to remodel my own back yard, so rather than turn this into another cash flowing rental, I might just wholesale it.

Here's the numbers:

Purchase Price (for you) $55,000
Purchase closing costs $1,500
Repairs needed (est) $25,000

Total investment: $81,500

After Repair Value: $100,000 - $130,000 (market is still slow here and a little hard to judge value. We're not a major city, so don't expect 20% increases in value here. This is a cash flow market, but a good stable town.)

Income:
Rent from the Big house - $795
Rent from the small house - $450

Total Income: $1245

50% rule - leaves $620 as NOI - (money left to pay the mortgage.) which is a 9% cash on cash ROI is someone paid 100% cash for this.

[b[ROI: [/b]
But putting $20,000 down on the total (after a Refi, cause it won't qualify conventional right now) and getting a $61,500 30 year, 4.5% fixed mortgage on on it ($311 a month) , it should cash flow around $300 bucks a month, which equates to a 18% Cash on Cash ROI.

Actual expenses (for those wondering) around $110 per month for taxes, around $50 per month for insurance. Water/Sewer/Garbage you could pass onto the tenant (though there might be some stickiness with the tenants since there is only one water. If I do this, I'll just have the big house pay it all and comp him 1/3 of the bill.) Vacancy is low in this area (very low) and the house would be remodeled so hopefully not too many repairs. But it's an old house (very old.)

Anyways - that's a ton of info. Maybe someone is interested cause your market is all dried up. Or maybe I just wrote this all out so I could get it all on paper! But like I said, if I make some money and fund my backyard remodel by wholesaling this deal -
I'll do it.

Private message me if you are interested in more information. I'll obviously share with you the address and anything you wanna know.

But please- serious folks only! It's gotta be cash :)

Oh last thing - if you are out of the area, I can get you connected with my favorite contractors, project manager, and property manager. And if you hear me complain a lot about "Aberdeen" - which I do - this is not in Aberdeen. This is Montesano, the little town I live in. It's the nicest town in my area, with 4,000 people or so, the best school in the county (with the state football champs!) and one stoplight. It's Mayberry. :)

Questions, comments, did I forget anything? - leave it below or PM me!

Here's the link to the listing: Click here to view the listing