I have a Grove Park Duplex under contract that is 4 Bed 3 Baths on both sides. This Duplex can rent for 1100 (min) a month on both side... This is located near the upcoming Atlanta Beltline project and the new Reservoir Park.
Would you do this project or would you walk away?
It depends on the numbers. Without financial details it is impossible to assess.
You don't give enough information for anyone to get a feel why you would walk away or why you'd follow through. What are pros and cons?
So this purchase price would be 135k... It needs 50k total in repairs... The average rent in the are is 1100 pre month section 8 is slightly higher.
What’s the ARV?
So, do you have cash? Would you need hard money? You can't get a normal mortgage for this. It would take a 203K loan, if it's going to be owner occupied.
Since you're talking about rents on both sides, I assume you want to hold as rental property. So, if you use hard money, there'll also be the cost of those funds.
So, you'll be close to 200K for a duplex that gets you 2200/month. Seems too high for me. But maybe I'm just spoiled with my properties in Pittsburgh.
Cash Deal and I was thinking between 185-195k to get it going. Factoring in 10k for miscellaneous expenses. Yes Pittsburgh is definitely a area of interest. Lately have you found the cost over there raising ?
Yes 1100 on both sides so 2200 min return
I personally love the Grove Park area and looking at purchasing an owner occupied 4plex at some point in the near future. Numbers gotta work!
@Paul Callaway what do you think about the numbers on this one ?
@Regginald Lewis By no means am I an expert, but I like that the rents are greater than the 1% rule. What are the comps/ARV like on the duplex? This will help you determine if you can refinance and pull out all your cash(if that is the goal). Also, what will be your monthly payments? If I can cover my monthly payment, get 50% extra to cover expenses and the rest be profit cashflow as well as being able to pull all of the cash out of the deal then I would go for it. Interested to hear what you decide.
@reginald...yes..Pittsburgh is going crazy right now. Investors are buying and rehabbing everything they can find.
@Michaela G. I know I was hip to the change to come some odd months ago and I got my hands on some opportunities over there now it's so competitive its driving the prices through the roof. Still cheap but I just hope the values continue to raise as acquisitions do.
@Paul Callaway everything you mentioned is achievable. The renter will be above the 1% rule. Also I was looking at it from a cash buy stand point. Comps are selling around 145k. I've managed to get the acquisition down to 125k. I like having these discusses.
@Regginald Lewis this is a long shot, but this property isn't on Ada Ave is it? I looked at one about 2 months ago that sounds the exact same as what you have mentioned.
@Regginald Lewis I like these conversations as well. The cashflow sounds great, but your equity makes me nervous in this one. You will buy for 125K$ and then do 50K$ in repairs for all in price of 175K$, but the house will only be worth 145K$. Am I understanding the numbers correctly? I would never want to put more money into a house than it is worth.
@Regginald Lewis Price and rehab would be too high for me. I use 65-75% of monthly rent to determine if my buy and hold deals are worth pursuing. The neighborhood determines which percentage I use, I then divide by 12%. I look for 12%, some people are happy with 8% and others will not touch anything under 15%. It all depends on your comfort level.
2200 x .65 = 1430 x 12 = 17,160/.12 = All in at $143,000.
@Regginald Lewis $1100/mo for a 4/3 sounds ok and likely to grow over time. That's very cheap so you have some upside there.
I'm with the others -- sounds like you need to strike a better deal than what you have now.
Also, in an area like Grove Park, how much square footage are you getting? Does the house have nice curb appeal? Proximity to Beltline (future) ... all these play into the price, appreciation, and liquidity.
I'm also with the others. Grove Park is a good area to be buying right now.
@Adam Abdel-Hafez no the property is off of West Lake. What was wrong with that one?
@Adam Abdel-Hafez no this house is on W Lake. What was wrong with that one?
I was just curious, i saw one off ada ave that sounds like this one about 2 months ago and was going to say if that is the same one then your rehab bugdet is too high. But, a 50k rehab seems like a lot. Unless it is almost falling down, typically most of the houses in grove park that need a lot of work have been vacant for a while so it things like (hvac, windows, flooring, paint, misc electrical & plumbing, etc). I would assume as well that the house is not that old, maybe build in the early 2000's or so like a lot of those duplexes over there at that size so $25k a unit is a lot.
@Rick Baggenstoss Yes and that would be 1100 pre side. I do believe it can rent more closer to 13 1400. How do you feel about that statement? What return do you look to see on your rental properties? The square footage is slightly above 2,500. I would say no to curb appeal because of vacancy, however, curb appeal can be accomplished. Also there is a great parking on the lot. It is close to the Beltline and the Westside Reservoir Park also.
@Adam Abdel-Hafez I agree with you I do believe that the rehab is fluffed a tad bit high. I think it can get done for a cheaper amount. The duplex is larger but it is clean.
@Rush Wall only if one of the houses surrounding was not vacant. Then rent would be closer to 1400. Oh well. I do think all if can be lower but you would really have to have some solid contractor pricing.
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