Duplex opportunity ATL

[Lee Pittman]

Have an opportunity to purchase a Duplex on Lindbergh Dr. NE between Peachtree Rd NW and Piedmont Rd NE. Built in 1955 the duplex has delayed maintenance and would like some input on my numbers and thoughts on purchasing. 

Monthly expenses

Taxes 445

Insurance 102

Mortgage: 1650

PMI: 243

Repairs: 300

Vacancy 150

Expected rent 1600 per unit minimum, 1700 is more likely

Purchase price 375,000

Downpayment 5%

Renovation costs 15000 (new floors/cabinets/appliances in Unit B kitchen)

Both furnaces are 17 years old

1st water heater-3 years 2nd water heater 7years

Roof:12 years

1st AC condenser 4 years 2nd AC condenser 12 years

Would appreciate peoples input, I will be living in unit B (House Hacking) First investment in Atlanta. 

[Ericka G.]

@Lee Pittman I know this area well as I used to live right off of Lindbergh. I loved living in this area and think it has a ton of potential due to Buckhead location, proximity to MARTA and midtown - that seems to be a good price for a duplex over there. The one concern with that area is over-building.  There are 4-5 brand new apartment complexes going up in that Lindbergh MARTA pocket along Piedmont.  That will be your competition so I'd call around and see what new 2bdrms are going for in that area. 2011-2014 I paid  $1300-$1450 (rent went up over 3 year period) for a brand new 2 story, 2 bdrm loft and had a gym. pool, business center, etc - those bldgs also offer low deposits/move-in incentives since competition is high for good tenants.  

You may want to place a dummy ad on craigslist and see what kind of response you get at $1600 and $1700, using exterior pics of your location and interior pics that are closest to how you will renovate.  Even at the $1700, doesn't seem like you will meet the 1% rule.  Not trying to rain on your parade, just wanted to play devil's advocate.  If the goal is to live mortgage free and bank appreciation, that could be a good bet.  From a rental cash flow perspective, however, it seems like less of a slam dunk.