I have a duplex for sale. One side is month to month and I was going to leave it as such because I hoped someone would buy it and live in one side and rent the other. Asheville has a housing shortage and anything even a 2/1 under $250K is a great deal. But after 2 weeks on the market I'm beginning to wonder about this strategy because my tenants are getting nervous and asking for a new year lease. So my question to you all is as investors would you buy this duplex based on this evaluation?
Based on what evaluation?
I was sending the post through BP link when I did the evaluation. I just uploaded it again. Does it work now?
Jason DiClemente and Joe Villeneuve, I am on a learning curve using this format. I ran BP rental program from the tools section. The PDF has price, rents, taxes, etc. Then there was a section about that said link it to discussions. So I thought the pdf would show up here. I then tried to attach it but that does not work for a pdf. I appreciate you reaching out I just don't know how to make the pdf show up here.
@Mary Love , you could pm the people that responded, or you could cut/paste the details onto this discussion. Also, you could give price, rental income, taxes. Then ask folks that are interested to pm you for full details. Good luck.
Appreciate the responses. I was really playing around with the program and the process.
Good morning Mary! My valuation is pretty simple for rentals. If a SFR is in solid shape, decent neighborhood, has good appreciation potential, I'm quite happy with a 1% MROI- paying $150k for a house that rents for $1500. This is darn near impossible to find in AVL, so many investors go down as low as 0.8% in these cases.
For a duplex, IF utilities are cleanly split, I look for more like a 1.1 to 1.15% MROI since they don't have the market gain potential and are usually sold to another investor. Many other factors come into play, such as the rent/sq ft ratio (the higher the better) and whether it's in or outside of city limits (and city taxes). If the house needs work, or even if the systems are aging, I add this to my initial purchase price for the calculation, plus a contractor's price margin for the hassle involved.
Good luck with it!
Thank you Chris. My question stems from the idea if I was a new investors would I buy it. For me I would and that is way I'm refinancing my duplexes at this price. I was just curious about others opinions because I have had some newer investors from Asheville say they would only pay $160k and I'm wondering what formula they are using because only homes in major need of repairs are 160k and I know from my own rehab projects that and 30 to 60k would need to go in them to get good rent. I think generic #s sometimes cause fear and prevent people from take that leap toward success.
I am surprised it has not sold. In this market everything is getting gobbled up-good and bad! Personally I would not be a buyer I want more CF; but that’s just me.