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!!
Emily the way things are going on the West Coast great deals are tough to find. Sure your cash flow could have been a little higher; but you could still be sitting on the side lines too. Good for you to get in there and pull the trigger! Sounds like a well maintained first score.
First off, you are farther along than me. I just listed my current residence on the market in Washougal, and have been looking to do some house hacking in Vancouver. I’m pretty positive I know which property you have purchased.
I am finding that all of the MF properties on the MLS in the Vancouver areas do not pencil out to be Cashflowing properties. The numbers just don't add up. High taxes, high purchase prices, and rents that don't match. Small increases in rent will go a long way though.
I don’t think you are in a bad position though. You have taken the plunge and gotten your feet wet! Sounds like that property has been well kept, and I agree that the area has a LOT of potential. It is smack dab in the middle of everything.
My advice is to use this property to learn everything you can, take the time to develop a strategy for the next, and continue on. Don’t worry, be confident, and stay positive!
I use DealCheck right now and it is extremely convenient for quickly evaluating properties.
300K is about market price for duplexes of that size and style near the 4th Plain corridor, of which I'd include Rose Village. I agree with you, Rose Village is improving; I've seen it change over the past few years and I'm inclined to think it will continue because of it's proximity to Uptown, SR-500, and I-5. Based on the capital improvements already made, especially the newer roof and updated unit, I'd say you did well. Not a 'great' deal, but in 5 years I think you'll be glad you scored that property when you did. I own a similar styled duplex near there, so I hope you're right! ;)
Hi @Emily P. ,
Looks like you did a fair amount of good research. I am personally a fan of the long-term prospects of Rose Village. The area is turning and it is turning fast. Your rents are estimated correctly based on what we are seeing. We are finding anything under $1300 per month for rent is getting a very high volume of applicants (Especially the west side of Vancouver). I help a lot of folks with investing in Clark County so feel free to reach out at any time.
Thanks all! I really appreciate it - what a great community this site provides. We are through the inspection period so now we just await closing! I'll be lurking in the forums and seeing where I can add value to the conversation.
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