My next hold deal? Huge Duplex in Provo, Utah
I recently had an owner of a duplex approach me (because I own a rental property in the neighborhood) to see if I wanted to purchase his property. The asking price (without agents) is $385k. Each unit of the duplex has 6 bed & 4 baths, has a two car garage, and has about 2400 sf. The units rent for about $1800/mo each (and both are occupied) with utilities included (utilities are about $700/mo for everything - I would probably want to change this so tenants pay their own utilities - Electric & Gas are metered desperately). The owner isn't willing to do seller financing. My loan guy said I could get a loan with 25% down at 4.25-4.375% 30 yr and have a monthly payment around $1700/mo. So the cash flow could be potentially pretty good.
Provo is a good area with two nearby colleges. In my duplex, one side is rented by students and the other side by a non-student family on Section 8 Housing. Provo does enforce zoning to three unrelated individuals per unit, but enforcement usually only starts with a complaint from a neighbor. The home was originally built with four units but the city said there wasn't enough parking (so each 5bd unit basically has it's own connected 1bd mother-in-law apartment with kitchen and everything).
Here are a list of my concerns: 1) Deferred maintenance (a lot of vinyl flooring in bad condition, original roof may need to be replaced in the next 5 years, etc...). 2) Fewer units make vacancies, or a bad tenant causing damage very costly. 3) I don't have the cash for the down - I either need to find a partner or sell or refinance an existing property.
To address some of these concerns: 1) I have a handyman I've used for years who could hammer these things out on a schedule that I could afford. 2) I've never had an issue keeping my unit occupied (I've even had the same tenants in one unit for over 6 years). 3) I've never partnered, but I'm willing to do so now if I can find the right person.
Please share your advice! Love BP and it's awesome members who are so willing to share.