First Deal Hunting! Need help jumping in

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Hey everyone,

This is my first post on BP so take it easy on me! I am a new investor in Southern, Coastal Delaware. I am constantly looking and evaluating potential deals and thought I would ask for some input on this most recent deal I came across. 

House was just listed for $55,000 and is a Duplex. Motivated seller! Mother passed and daughter is looking to sell. One unit is "livable" and other is NOT. Roof leak compromised 2nd story floor and ceiling on first floor. 

Budgeted for $125,000 in renovation repairs and comps in the area are selling for $143/sqft with estimated rental income of $2,200/month.

The numbers look good for me but it feels like a big deal for my first to jump in to. Not to mention, I do not have a ton of cash to throw around and will be looking for creative financing to make this happen. 

Any advice is greatly appreciated!

@Zach Warner Did you have a contractor do an estimate on repairs, the roof leak sounds serious. Is $125,000 the ARV or the amount of money needed to repair. Have you thought about house hacking it? Sounds like could be a good deal, you could always just go for it and learn from the process.

I am walking through with a contractor early next week. $125k is my estimated money needed for repair. ARV is estimated at $285k using the average $$/sqft of the comps. The seller was not even considering someone rehabbing the property until we spoke to them due to the condition of the property. They were listing it for the price of the land. Our walk through next week will be eye opening as to whether rehab will be possible/worth it.

I have and would LOVE to house hack it. But, I am married with a 3 year old and a 3 month old and would have to get the wife on board for that.... I am trying!

Thank you for your response. I am very anxious for the walk through!

Good luck with the walk through! Make sure you triple check the numbers, and be conservative!! Are you sure the property tax is correct? Seems super low at $500 per year. And tax amount would change from before to after rehab/refi which is not reflected in report. Also I'd suggest bumping up the cap ex and vacancy to be conservative. How  long do you anticipate the rehab to take? How many contractors are quoting the job? If possible line up a few to quote it

Seems like you'll be able to pull out some cash from the deal if the numbers are correct!

Great advice. Thank you! 

$500/year is correct and pulled straight from the MLS. Property taxes in our area are extremely low and a lot of retirees move here for this reason. I did not consider that the tax would rise post rehab. Thank you for that! I am also going to take your advice and bump up the cap ex and vacancy.

The general contractor I am walking through with is a potential partner and very close friend of mine. I am hoping to show him the potential and convince him to partner with me on this deal. If he does not, I will take your advice and have get multiple quotes. I am hoping the rehab would take a max of 6-9 months but will have a better idea after walking through. 

My plan would be to purchase with cash and finance the rehab cost. 

Again thanks for the feedback!