Insurance Agent · Moundsville, WV · Member since 2014 · 17 posts · 12 votes
Hi everyone,
I've been soaking up all the info I can get my hands for about the last year .I came across the Podcast about 6 months ago and love it and this site is awesome and has inspired me to start taking action!!
I am originally from the Detroit suburbs and am now living in the Wheeling, West Virginia area and work just outside Pittsburgh. I would like to invest in both the my old home town and my new one.
I found a duplex that I'm going to put an offer on. I love to hear some insight from everyone here if this seems like a good deal or not.
I'm offing $42,000 and estimate I'll need to put $15,000 more into it. Each side has 2 bed 1 bath. The units where renting for $350 each (they are empty now)after the improvements I expect to rent them for $550 to $650 each. I used the 50% rule and gave it a ten cap to come up with the $42k. Does this sound like a good deal, anything I should know before I make this offer I might not have thought of heard about?
50% rule just tells you whether or not to look further at the deal.
Next I would find out exactly how much the following expense are going to cost you each month. "The tenant pays" is a good answer as well. Put those numbers up here and I'll tell you what I would pay for the place.
Taxes
Sewer and Water
Trash
Heat/Utilities
HOA
Cap Ex and Ops
Insurance
Mgmt Fee - as a % (general consensus here on BP is 10%. include it even if you think you are going to self manage)
Vacancy- as a %. 8% represents 1 vacant month/unit/year
I would make sure you comp the rental rates in actual neighborhood. What is the actual asking price and is the neighborhood stable or will you need a bullet proof vest. You also might consider a single family for first time if your not going to live in one of the units.
Taxes last year were $806, sewer and water should be around $65, Electric and heat are metered separately so the tenant will pay those. The rent at $350 was low for the comps, I have been doing all my projects at $550. Rent-o-meter says $800 is the median but from what I know and have called about thats the high end, $600 is market from what I find. Its listed for $55,000 but it been on the market for for over 180 days.
Aaron thanks again your feed back has been great and that's what makes me so excited about finding a forum like BP. I really appreciate the time you've taken to help a newbie.