I am new to real estate investing and wanted to get everyone's opinion on a deal I have come across. There is a duplex for sale in my neighborhood and the seller is asking 120k for it. It is currently rented out at 750 per side. Unfortunately I don't have a bunch of money to put down on it. I always hear people talking about making a deal based on "their terms". Would love to hear some suggestions.
Video from BiggerPockets on how to analyze rental property in a very simple method. In order for anyone to chime in, people would really need to understand the basics of the numbers like cash flow or cash on cash ROI.
Thanks for the response. I guess what I am looking for is what are some well known strategies for buying a property like this? An example would be, taking advantage of owner financing or any other no money down or low money down strategies that I am not aware of...
The property would generate around $500 a month in cash flow with no money down (financing all of the $120k).
You need to look at the sale of this property as a solution to a problem and to be competitive you need to find how you can improve that. Sometimes it's easy, sometimes they'll straight up tell you.... but if you can figure it out it'll help.
Let's pretend this is a landlord retiring and wants out of the game.... now your options are:
Come in at list, then work down depending on inspection. This is standard, boring plain jane stuff...
Come in low (based on your evaluation of the condition), make a short inspection period, quick close. If you get counter, toss in more earnest money to sweeten the deal/show your serious. If no counter you're probably not getting credit/asking for repairs... if you did though you could use that to lower it.
Now, more realistic for you:
FHA/VA/USDA are all ways to buy primary w/ little to no cash down. Live there for about a year (or whatever the requirements are for the loan you get) then after that move some where else. This is most likely way you're getting in for little money.
Owner finance, this is unlikely, but you can try. You'd probably want to come in at list, and maybe just ask that they carry the down payment or have balloon payment after x years so they can get their money quickly. This might not work, depending on why they are selling, they might need the money.
Find a partner/investor for the down payment. Or if you have credit/equity get loan/heloc. IF YOU DO THIS MAKE SURE YOU TALK TO LENDER FIRST TO MAKE SURE YOU CAN STILL GET LOAN.
If you are looking to get the place with a lower down payment, you have two choices; owner financing or live in one of the units and do an FHA loan. If the owner is willing to carry, that's usually listed on the MLS listing. If living in one side isn't something you want to do, have your agent call the seller's agent and see if it's even a possibility, and if so, what kind of term's they'd like. You can devise a strategy from there.
Best of luck!
Yeah, the owner is looking to dissolve the partnership and sell. It looks like he bought it in 2008 for 100k.
Thanks for all of the suggestions!!
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