I’m trying to get some opinions and different points on view on a duplex I looked at this morning.
Each unit is 2 bed and 1 bath. They rent for $400/month each. I can pick it up for around $50k. There are tenants in the units and they are on month to month.
I had my contractor look at it with me. It’s in pretty rough shape overall. Nothing needs to be done but there are some items that should be. Roof, siding and a full remodel in each unit. My contractor said all of that would be close to $50k.
The dilemma: I can buy the unit and technically do nothing. My payment would probably be around $200-250. So I would
Make around $650/month barring any maintenance fixes. On the downside, if I buy the unit for 50k and put 50k into it now or in the future, I don’t think that it would generate any additional equity. I think a place like this would max out at 100k on a good appraisal.
I'm also in the middle of doing a fire restoration flip for cash and a remodel on a house I'm trying to BRRRR so I'm a bit tied up at the moment.
It looks like you answered your own questions. When you are not 100% positive that your numbers are perfect then don't be anxious to invest and keep your money in your pocket for a better deal.
You are pretty much breaking even with this property if you do any kind of renovations, so I don't think its worth it. However, I would look through some local papers and do some research to find out if any upcoming developments are in the works like: A hospital, university, stadium or shopping center being built nearby. If none of that is the case, keep moving.
Thanks @Jack Orthman. It’s the advice I don’t always like to hear but need to hear every now and then ha. Normally I have limits that I try to stick to. I’ve just had a vision of being more aggressive over the next few years but I need to remember not to sacrifice quality.
@Brian Adzadi it’s funny you mention that. The hospital here is doing a 50 million dollar expansion. That being said, I don’t know how well these units will appeal to that audience. My realtor sent me a property a mile or two from the hospital (the hospital even looked at buying it) that may be a sound investment if I can talk them down to the right price.