Rental Property - Accounting for Future Repairs with Purchase Price

[Account Closed]

Good afternoon, everybody,

I'm working on getting into REI, and right now I am looking at the possibility of purchasing a duplex.

The windows in the upper unit (and probably the lower) are original to the house. They slide well, but the wood frames are drying out and beginning to crack, and several of the screen frames have been bent. - In a flip situation, I would take the need for new windows into account, but my realtor advises me that the state of the windows shouldn't be considered in the offer price for a rental property. I'm tempted to disagree, but I wanted to see what others thought.

Property Summary:
I've run the numbers through the deal analysis form, and after paying all expenses, I would be cash flowing $274/mo. (I used the numbers @BrandonTurner suggested in his rental property analysis webinar for future assumptions [2%} and monthly variable expenses [10%])

The cash-flow is based on full occupancy (two tenants), but there is currently only one tenant in the duplex.

The duplex is an upper-lower set-up (so one tenant lives in the split-level style basement with egress windows). I was only able to tour the upper level, so I will need to see the basement before making an offer, but I was wondering if anyone could give some advice about the purchase price:

 - The duplex is currently listed at $10,000 above assessed value

 - Overall, it's in good shape (built in the 70's), with no major repairs needed externally, outside of the windows. (needs some vinyl corner trim and bushes need to be trimmed - driveway is badly cracked and could use a resurfacing, but is still usable)

[Terry Hershberger]

@Account Closed 

I believe all repairs should be considered. It doesn't matter if it is a rental or not. Fact is, after it closes, you own it, good or bad. It sounds like the realtor is just looking for their commission, which is understandable. because of this, I would not take the advise of a realtor about what to do with my investment dollar. JMHO.

If you don't have access todo it yourself, I would also ask your realtor to get you all the comps on sales of equal properties within the last 30-90 days for you. That way you should be able to consider value. 

Hope this helps ya!

Happy Investing!