Search a long time and finally found a deal
Just got this bad boy under contract. Here is the deal, see if you like it or hate it. I'll take all comers on this one.
Property is on Gateway Drive in Albert Lea, MN, where I own 4 other properties. It is a side by side duplex, 1100 square feet plus per side, 3 bedroom 1.5 bath, with tenant having separate gas, electric, and water meter (tenants pay all utils).
Original List Price: 139K
My accepted offer: $118,500.00.
Current Rents: $1500.00
Market Rents: $2000.00
My Costs:
Finance at 25 year am, 75% of purchase price, or $88K. Mortgage is $554.00
Insurance $85.00 (thanks NREIG)
Taxes: $233.00
Vacancy: 5%
Repairs: 5%
Cap Ex: Needs cosmetics...new countertops, sinks, pergo flooring in kitchen in dining room, minor wall repair, exterior pressure wash (vinyl), minor vinyl repair. I have a handyman in Albert Lea...will get this done all in about 3K.
This is in one of the nicer neighborhoods in town, right next to a golf course, with residential development nearby, market rate rents, and owner/occupied houses, some new development, and some other duplexes. A nearly identical duplex rents at $1K per side, just next door. Rents there were $925.00 as long as 6 years ago. I feel safe going for $900.00
I ran this through the calculator. Even at the existing rents, which were market rents 10 years ago, this is a 10.40 cap. I will raised rents to $900.00 a side, two months after acquiring, raising this to a 13 cap.
Doing the inspection Friday.
Most Popular Reply
Congrats on another good one, @David Moore ! Looks fine by me, definitely getting the rents up will help substantially.