Feedback on potential deal

4 Replies

Hey BP, I am looking to get started in real estate and have recently come into an opportunity to purchase a property in Allentown that is still off market directly through the seller. Would love to get some feedback to see if it’s in line with my own analysis. Here’s the property: https://www.zillow.com/homedetails/1342-W-Walnut-St-Allentown-PA-18102/81916084_zpid/ The seller is asking $160k (personally I think that’s high). I would be inheriting the tenants, who according to the seller are decent tenants. Currently renting for 1 unit for $800 and the 2nd unit for $900, tenants pay all utilities except water with no leases in place. My estimation is buying as is, I’ll have a net cash flow of about $500 with mortgage, insurance, taxes and water utility. There is an unfinished basement, which based on a little research, I believe I can turn into another unit and possibly increase cash flow by another $600 at least. I’d appreciate any and all feedback from everyone!

@Jose Romero

1) You may not want to post the actual property address on BP. I am sure 99% of people on BP are ethical - however, you never know and someone can swoop the deal from right under your nose.


2) I think $160,000 is personally a little bit high for that property.

3) Alot of the basements in Allentown built in that period are not ideal for another unit.
You may be to fix it to add additional square footage; but not another unit.

Originally posted by @Basit Siddiqi :

@Jose Romero

1) You may not want to post the actual property address on BP. I am sure 99% of people on BP are ethical - however, you never know and someone can swoop the deal from right under your nose.


2) I think $160,000 is personally a little bit high for that property.

3) Alot of the basements in Allentown built in that period are not ideal for another unit.
You may be to fix it to add additional square footage; but not another unit.

Thank you so much for the feedback, not too worried about anyone stealing the deal as it's through a family friend. I am definitely going to negotiate on the price though.

@Jose Romero , I agree with @Basit Siddiqi - the asking price is too high to be a good deal, and I wouldn't expect to be able to add a third unit based on a typical property in the neighborhood. To buy at a 10% Cap rate the seller would need to come down to roughly $100k. I wouldn't get too excited about this one, since there are currently 16 duplexes in the neighborhood listed for a lower price.

@DavidRibardo thank you for your feedback. Agreed on the price being too high, this would be my first deal so I’m looking at it more for experience than anything else. That’s not to say that I’ll take any deal good or bad, so will definitely be thinking on it some more before moving forward.

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