Hey Guys! I am about to do my second deal and am looking for some advice. I am buying a C+ class duplex in Memphis (2/1 each side) with owner financing- $65,000 with 10% down and 5% interest, 10 year term, can pay it off after 3 years if I want, no prepayment penalty. ARV with about $20-25K in renovations should be around $110,000. Past rents were $450-500 each side for 750 square feet/side. After repairs I am hoping to get $750-800 per side.
One side is vacant now, the other side the guy is moving out now. The owner wants to close Jan 1, but wants to put another tenant in now for the side the guy is moving out of. He was looking to rent it for $600 on that side, but I told my agent that I would just pay him the $600 rather than have him put someone in that I can't vet out. I would love to hear your suggestions on what you would do.
I think he will let me in early to begin renovating, especially if we agree to the $600 rent payment (which I am going to see if he will just roll into the loan anyway). My original plan was to do cosmetic renovations to whichever side looked the best and rent it out, and do the more in-depth renovations to the other side before renting it out. I have cash from a HELOC that I can use for the renovations and could do both sides at the same time.
Would you do the same thing as me with the $600 payment rather than letting him find someone?
Would you Renovate both sides at the same time, or split them up and renovate them one at a time?
I wouldn’t let him pick a tenant, but I would renovate both sides at the same time. If you need some contractors let me know, I have two who I highly recommend their work and they are reasonable with their prices. Hell, I’ll come out and help you for a small fee lol
Both to get it over with.
@Rousner Ermonfils Yeah I am always looking for some good contractor contacts if they are reasonable and do a good job. I see you are in Millington- my First Rental property is actually in Millington off of Navy Rd! hit me up and we can meet up sometime to chat about real estate. I try to attend the Young RE Investors Group meetings at Railgarten in Midtown Memphis on the 2nd to last Tuesday of each month. If you haven't gone you should check it out!
@Ryan Schuler I’ll PM you