First time investors, Rose Village Duplex
Hey everyone! We jumped into real estate investing this spring and only recently found Bigger Pockets. I work in urban planning and have been thinking a lot about the ripple effects of the new waterfront development in Vancouver, so we opted to focus our search there.
We are nervous that we didn't do enough research before bidding. I was wondering if some of you might be willing to weigh in on this deal, a Rose Village duplex:
- 4BR/2A duplex ~1500 SF
- List and offer price $299K (We feel we might have jumped the gun by offering listing price)
- Our PITI would be around $1500.
- We were thinking 5% maintenance and 8% repairs. Units are separately metered for water and electic.
- We expect rents of $2000-$2100 for both sides. One side is currently occupied by a 5 year, low maintenance, pay on time tenant at below market). We plan to raise her rent incrementally each year.
The duplex doesn't need a lot of capital repairs, and we have receipts for all kinds of improvements the sellers made going back to 2010 (new roof in 2016, remodeled vacant unit as of last month (new carpet, paint, trim paint), painted a few years ago, weatherization project a few years ago, new sewer in 2002, new double paned windows in most rooms). Main known cap ex from the inspection report is potentially a new furnace and water heater in one of the units. Inspection came back today with only nominally high radon, those appliance issues, and other minor stuff (rotting post in deck, etc).
When I read bigger pockets and the 1% rule, I get nervous that we totally jumped the gun. But then the local Portland area forums say that the 1% rule is hard to meet here unless you look far and wide.
Though it's a class C area, we see a lot of potential in Rose Village. There are many homes on the street that have been well kept and remodeled. The house next door is kind of dumpy, but the house across the street has had clear aesthetic improvements.
Your thoughts on this deal would be very much appreciated!!