Duplex in Minneapolis - Is this a good first deal, possible owner-occupancy???

5 Replies

Okay, my wife and I are ready to start looking for our first deal. Our intention is to purchase a 2-4 unit home and live in one of the units, thus taking advantage of FHA/203K financing.

I cam across a HomePath duplex property that looks very promising.  I'm not very familiar with HomePath, and I haven't had the chance to check this property out in person... but similar duplexes in this area can go for much more than what this property is listed for.

Here are the numbers:

  • Listed price: $105,800
  • ARV: I have no idea... but if the right repairs are done to it, it could easily be $175-200 in value
  • Estimated repair costs: Knowing it's foreclosed, and listed as "requires extensive repairs," I am putting them at $50,000. Again... that's a big guess on my part, as I haven't seen the property yet. (NOTE: It was stated as previously a SFH, so would probably have to be re-converted to a duplex).
  • I estimated monthly expenses (including 10% vacancy/capex/repairs as well as PITI) around $1500 or so.
  • Potential income (if both rented) could be around $1800-2000, of course half of that if we lived in one unit.

Okay, what are your thoughts? Am I looking at this right considering its HomePath? What should I be looking for when I take a look at the place? Based on my numbers, if both rented out, I could be easily getting a CoC of double digits...

Any feedback appreciated!  I'll answer any questions.  Thanks!

Check and see what the house is zoned for.  You don't want to buy and then find out it is illegal as a duplex.

As an FYI if you wind up doing cabinets check out Building Material Outlet they have a location in Minneapolis they were Waaaay less then Home Depot here in phoenix, less then half the price and carried a lot of cabinets in stock here at their Phoenix location.

BMO

Bob E. MBA, LD Funding, LLC | [email protected] | 909‑353‑3863 | http://www.LDFundingLLC.com

@Sam Hodgett  with out you seeing the property hard to really say what your facing with repairs, pictures can be deceiving sometimes. With rough numbers though I would say you need to be around the 70K or so.

Hey @Sam Hodgett ,

@Bob E.   has a great point checking on the zoning. I have a friend that thought he bought a quad, but it had been rezoned as a triplex during an inspection because a unit sat empty for 2 years. He's been denied multiple times trying to get the 4th unit approved again.


[email protected] Hodgett,

These guys bring up a good point about zoning.  You can do a preliminary check online, but if you actually are going forward, it'd be good to talk to them in person and get anything needed in writing before closing.  Minneapolis zoning info can be found here http://www.ci.minneapolis.mn.us/zoning/

When you don't have mls access, I found www.redfin.com to be helpful when researching comps...seems to be more current than zillow.  Once you see what duplexes are selling for, you still want to run the numbers to see where your cash flow would end up.  A lot of people are buying duplexes at prices that don't cash flow these days they're living in one side, which might make sense for you personally depending on how long you plan to live there.  

@Bob E.  - @Jeromie Hamann  - Dylan S. & Dylan - Yea, I'm learning how to comp and value properties.  I plan on visiting the property as soon as possible, so that will definitely help me determine the value better.

Thanks for the advice guys!  This would be a possible "owner occupy" depending on the numbers... so we'll see!  I'll keep you posted.