My First Deal: A Duplex
Hey folks, well I think (hope) I finally found one that will work for our first deal. We are still in negotiations, and I could use any suggestions you fine folks would have. Couple top-of-mind questions I have:
1. Does this look like a good deal?
2. We aren't using RE agents, any trustworthy contract templates I can use? Any advice here?
3. Who should pay closing costs? What's typical today?
4. He was asking $75K, and I said I'd rather be at $70K, but that was before any inspections or anything else... and before we agreed to not do agents. I'm considering making an official offer of $65K with the fact that we won't be using agents AND he indicated he wanted to sell as-is.
5. Any help on the process including inspections needed, I'd greatly appreciate! I plan to line up a termite, home, and HVAC inspections.
6. What else should I consider? Thanks!!
Here are the details:
Current Price: $70,000 (still in negotiation)
Property Taxes: $2,613
2 units, both 2bed/2bath
New carpet, roof is 2 years old, heat pump is "fairly new" (i need to check this out), floors look ok, and the units seemed to be in decent condition when I visited today.
Rents: $600 per unit, both rented with one under lease, the other month-to-month
Insurance: He said he pays $1300/year for insurance so I used the same.
Loan Interest Rate: I simply could not find anything reliable to say what my rate would be. I need to talk with my lender tomorrow, but I am estimating 4.75% with no points on a 30yr fixed, conventional loan. My credit score is 800, and I have no debt. No clue what interest rate will end up at.
Closing Costs: Who pays those typically? I estimated $2,000.
Here's the screenshot of the Rental Property tool:
We did walk through the property today, and it really does look nice inside.
The left unit was well kept, smelled great, no issues.
The right unit, the tenant has a cat and two dogs (not supposed to have pets, and he knows it), one of the bedrooms smelled distinctly like cat urine. There is also a few water spots over the kitchen ceiling which the owner said he'd have that fixed this week, assumed it was something to do with the HVAC drip pan or something. Also, the tenant didn't want us to go in the master bed/bath because he said his girl was back there and it wasn't clean. So no clue what's up back there, and should I require that I can walk that area first?