Looking for advice on a buy and hold duplex in PA.
A long time friend is looking to cash out of his duplex rental property to get away from tenants and pay off his primary home. He has it on the market now for $95k. He said he'd sell to me for $60k.
- Property grosses $15,400/yr
- 2 units at $625 and $675/month
- He has all receipts and is happy to share
- Owner pays for heat, all other utilities paid for by tenants
- Furnace is old and will soon need replaced
- Electrical is older but he said "doesn't need attention immediately.
- New warranty on roof transferable to me
- Besides electric and furnace, he says it should be turn key
- Could use some paint
- I used the BP Rental Property Calculator and even figuring in $65k (instead of $60), lower rent, painting, lawn care, CapEx for furnace ($4k and redo electric at $8k) and a few other cushions, I still come up with about 13% ROI.
What am I missing? Happy for any and all input! I had another friend who has 5 rental properties who looked at the website and said it'd be a good deal, even at $95. Then I told him I could get it for $60. He said if I don't buy it he will (although I know he wouldn't do that). I plan to go through the house whenever my friend is in town. What do you guys look for? I know nothing about electrical!
Please go easy I'm a newbie, but this seems to have "deal" written all over it and I don't want to get stuck in analysis paralysis!