Would you pull the trigger on older duplex

2 Replies

I’m considering a duplex and can’t decide what to do. It’s a 1895 home with stone foundation and no sill plate. Slight slope in outer bedroom. Roof was replaced but has serious bow in back area which can’t be reached to investigate. It could use some paint and shingle repair. Electrical and furnace are updated. Needs new toilets, pedestal sink and other odds and ends. Price is $137k, rent should be about $1300-$1500. High rental demand so it should rent quickly. Upstairs unit is already rented by a single woman who has been in it 3 years, smoker with a dog. Tenants pay utilities and owner pays WSG. Mortgage would be $660. 8% Mgt fee. Looking for advice, feedback. I have one other single family rental and I’m looking to buy and hold multifamily rentals. This property is a five hour drive from my location so I will probably have it managed. Plus it’s a class c and a so so area.

With a trashed foundation and trashed roof, I personally wouldn't touch it unless I could get it at the flipper price... ballpark ARV*70%-rehab = max price.

Which in all probability means I personally wouldn't get it, because someone out there is probably being foolish is comparing the price to other properties that do not have a trashed foundation and roof & with their flawed reasoning they think it's a great deal. I don't want to "win" at a game of who is the biggest fool!

However if the preceding paragraph is not true, and I could get it at that steeply discounted price, that's a different story.

Looked at a very similar property last week - concrete foundation on a crawl, newer heat pump, metal roof. In the end, I just couldn't do it. The cash flow per door was a little weaker than what I wanted, and while the area might be improving, it's not clear the path of progress from downtown is going there, and I wasn't comfortable with the risk.

Like @Chris Mason said, if it's a screaming deal all of the above might change, but I just couldn't do it.

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