Hi all! I just noticed a new MLS listing for a duplex, each unit is a 2/1. One is vacant (rents 575) the other is occupied at 475. I am getting the estimated repair value for what the agent has dubbed "structural issues." Currently listed for $79,900. This seems like a great price for our area. I would want this property to occupy the larger of the two units (the unrented) while we repaired it and eventually the other, I'm guessing. I would hope to make stylish upgrades and increase the rental value. The current rental rates for these units are low compared to what I have seen in this area. It is in a prime location close to downtown and the military base, making it a great rental opportunity. We are military and would move within the next 2 years and likely continue pursuing buy and hold rental properties if our financing options allow. My questions are: what kind of offer would be considered smart, especially considering the mortgage would likely be paid for just by the other unit while we occupied one? How scared should I be by "structural issues," especially since it is still occupied? Tenants currently pay gas and electric and taxes were $670. I would need to look into some financing other than the VA loan as we are using it for the mortgage on our current home. Suggestions? Thanks all!
Will you be given a chance to do thorough inspection before making offer.. I would be concerned about the structural issues. could be anything from foundation to the roof. otherwise deal looks ok. about how much in re hab costs besides the unknown structural issues. are the kitchen baths updated ? What would be the plan for the house you live in now ? rent it out while living in the duplex? how much rent can you get for that ? are you planning on managing by your self while you fix it up ?
Thanks Kenneth! I'm sure I could complete any number of inspections I'd like prior to offering....supposing someone else doesn't just nab this deal without doing similar due dilgence...from photos the rehab looks to be almost entirely cosmetic type updates. We have every intention of selling our current home once pending renovations are complete and I have this baby due in two weeks. It's just a timing issue :) it would free up our finances to sell. I should mention I am studying for my re license and hope to sell it myself once licensed, so again it comes down to timing. Yes, as an owner occupant we would manage the other tenant on location for the time being. And probably still do so even after we move on. I will update once I have the repair bid!
@Collette Douglas In a former life, I worked as a structural analyst on the Space Station design. Houses and duplexes are obviously different from space sturctures, but I know a bit about structural issues. Without know exactly what you have there, it could anything from a non-issue, to a $500 fix, to a $50,000 fix. But it really doesn't take a structural analyst to tell you what you need to do. First, have a home inspector do an inspection. Based upon his/her report you may also need to hire a licensed engineer to do an inspection. Of course you can make the offer contingent upon your inspections. Are you working with a good buyer's agent Realtor (you should be - especially since they usually work for the buyers for free)? Your Realtor should have given you the same advice that I just gave you.
I agree with Bryan L. If you think it is a good deal, put it under contract with an inspection contingency and get it inspected. I have found a good inspector can generally give you enough info to decide if a property to decide if it worth pursuing despite a structural issue. We have looked at several properties (even had one under contract) with structural issues that likely would not have had to have been repaired to rent them but then it would have been an issue when we wanted to sell.
Any ideas for financing we might qualify for without taking an expensive hard money loan? Can a person obtain FHA financing while they currently hold a VA home mortgage?
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