Would you buy this duplex?

Question

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?

Joe Villeneuve · Answer

Based on what evaluation?

Account Closed · Answer

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!

Bjorn Ahlblad · Answer

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.

Mary Love · Answer

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.

Mary Love · Answer

Appreciate the responses. I was really playing around with the program and the process.

Marc Winter · Answer

@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.

Mary Love · Answer

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 · Answer

I was sending the post through BP link when I did the evaluation. I just uploaded it again.  Does it work now?

Would you buy this duplex?

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