Would you make an offer on a duplex with termites listed at 45k with two tenants paying just over 400 a month each? The rest of the house seems sound and has been owned by the same gentleman for more than 13 years. The property manager seemed clueless on building maintenance and I'm not even sure how he could be a property manager in PA without working under a broker. Your thoughts and questions?
I wouldn't really care about termites. Money solves that problem, do an inspection if you get serious and figure out the cost to fix. Spreadsheets will tell you what to do from there.
As for the PM....yeah i'd replace them too. 45k investment plus maybe 5k in damage/treatment isn't a horrible deal. I'd have to know the rest of the numbers though to see the return. I'd also highly consider running away from a low rent like that. I have a mobile home I'm trying to be rid of that is worth 10-15k, it collects 450/month. Returns are nice when you play in the gutter, the headaches seem to balance off the returns, at least for me.
Leigh C this is a typical apartment rent in my area, there is some absolutely horrible single family homes for sale and a few not as bad apartment buildings that are in my price range for purchasing a convenient first investment property. The tenants pay for all utilities, and lawn care. Taxes are approx. 1300 a year. I am pre-approved for an 80% traditional loan. What other numbers would you like to know? This property has been in the market for over a year with an out of town owner.
Don't forget, just because they are asking 45K doesn't mean you offer them that. Mention the termites and anything else you can see that needs to be fixed and low ball them. The worst they can say is no and at that point you start negotiating.
Also are these tenants in a lease? If so you have to honor the rental rate, but if they are not in a lease, or when their lease is over you can increase the rents. That is a common happening when someone new buys an investment property.
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