Investor · Ashland, KY · Member since 2014 · 77 posts · 12 votes
Alright, I'm currently looking at a duplex for 53k. Not to rough inside but it does need a new roof and gutters ASAP and Central heat and air installed. Windows need updated aswell.
Privacy fence needs panels replaced and the porch needs painted.
Currently rents for $825 a month total. With central heat and air $1200-$1250 should be easily done.
The current owner is interested in seller financing the deal or atleast part of it.
I feel as though I'll have close to 70k in at after all repairs and updates. It should definately be at $1200 then.
It sounds OK to me. I base that on requiring an 8 cap. assuming a 50% expense ratio and a 16 cap on the additional rent that you create. It is my opinion that you should not pay full price for the extra rent that you create. I value it at 1/2 price.
To me, financing is only a factor if it is below or above market rate.
Check out the Rental Calculator under the 'Analyze' tab above. That will help you better understand the ins and outs of this deal.
How will you be financing this? Can you get in a lower offer due to known issues with the duplex? Have you factored in taxes, insurance, property management, maintenance...etc?
It sounds OK to me. I base that on requiring an 8 cap. assuming a 50% expense ratio and a 16 cap on the additional rent that you create. It is my opinion that you should not pay full price for the extra rent that you create. I value it at 1/2 price.
To me, financing is only a factor if it is below or above market rate.
When you say duplex, do you mean half the duplex or both units... in different parts of the country they use Duplex, semi detached, and half a double, all to describe the same type of 1 unit SFR.
What is the value when this is all fixed up and in great shape?
So you are putting $70k in rehab ON TOP? of the $53k??
I am not trying to be dense.... trying to get the info to help.
I'm not sure I can cut the cost of repairs and updates down by much. As their is only baseboard heat and window air now. 3-4k per apt is a pretty cheap install. Their May be some wiggle room with the roof though.