I think I am ready to move.. suggestions on this deal

[Billy W.]

Hello Everyone,

I have found a property that I am interested in. I posted this deal a week or two ago, but I have some more information and I would like to get others opinion on the deal.

-4 Unit Duplex
-Total Rents: $2100/month
-Fully Rented with year long leases
-Units are in good shape, absolutely no noticeable renovations needed
-Blue collar neighborhood
-I will add coin laundry for basement

Expenses (as current owner told me):
Electric $119 a month
Insurance $140 a month
Water $20 a month
Sewer $15-20 a month
Trash $40 a month

Taxes on this property are around $3800 a year.

Asking Price: $122,000 (down from $133,000)

Current owners bought this property for $132,500 in 2004. They refinanced the property in 2009 at $114,000.

RealQuest.com gave a Corescore of B and a estimated market value of $85,000.

What do you guys think of the deal?

I do not want my first one to be a bust. How low should I start my first offer? I was thinking offering $90K.

I will include in my offer that it is contingent on an inspection first. Anything else that I should include in the offer? (appraisal? :/)

Any other advice in proceeding?

Thanks

[Tracey B.]

Billy, do you have any zoning, multi family dwelling licenses or other requirements for multi units in your area? In my area we have to have license, lead certificate on each unit, separate meters for gas and electric. Does the unit require these things? Does it have separate meters? Can you view proof that tenants are paying each month and not behind? Also, the asking price has to be in line with the value of the property. Have you had a realtor pull comps for you or have you done any research on what the true value of the property is? Do you know what kind of rents to expect per unit and do the rents fall in line with the current leases? I would need to know these things to really help you evaluate such deal as everything has a price. On the surface though I would be interested in it. Have you done a walk thru, how are the tenants? Do they have bad attitudes, have they given you any complaints about the owner? Definitely talk to the existing tenants and see what they have to say, they may tell you things like "the roof leaks, etc etc." Be sure to do your due diligence. I bought a duplex in move-in condition and a few months after I closed, the furnace needed ti be replaced, the roof leaked, etc. These things can get costly if you aren't prepared. Make sure you check out the roof and furnaces.