Waukegan Duplex, To Buy or Not To Buy?
Hi BP. Still working on timing my transition from stocks to real estate. But I'm close. What I'm looking for here is a little insight on a property in Waukegan, IL. I spoke with the owner and looked at the house one year ago. It still hasn't sold and it appears they raised the price $5k. I assume that's because he is no longer representing himself and has an agent.
First time we looked at the property, he wanted $65,000 and had only the upstairs rented. At the time I looked at it with a friend/potential partner. Waukegan is 5 minutes from a huge Naval base so there's usually no shortage of military families to rent to. If you're not familiar, Waukegan isn't the nicest area. However, the property in question is in a pretty good location: adjacent to a garden run by the city council, less than a block from a brand new park, and kiddie corner to a church/Catholic school. This is my first deal. I'm still apprehensive about the area, but again, just because I wouldn't live there doesn't mean no one would. Doesn't appear to be many vacancies in the area and the seller is trying to get rid of his entire portfolio and move to Florida.
So here it is:
Asking price: $70,000
What I intend to offer (if I offer): $45,000. I could do all cash with perhaps some help from family (less than $15k) or friends/partners (one has asked me to find something he could join in on with $20k, the other serious one has about $35k-$50k to invest with me).
It is rented, top and bottom, for a total of $1750/mo on new(?) leases.
The only work I think it immediately needs is fixing the back steps and a few roof repairs. Nothing that would break the bank. Now I'm not an expert and have not had it inspected or appraised yet, so I could be wrong and it might need a complete tearoff. Or a new furnace. BUT...
As it stands, the numbers look damn good to me. Is it the nicest house I could get? Absolutely not. But I wouldn't have to finance and could potentially do the whole deal myself, which would be nice. What are your thoughts BP?