Rental Property Investor · NJ · Member since 2021 · 3 posts · 2 votes
Hello everyone! Im going over a few deals this week. Still looking for that first purchase. I recently came across a property thats very interesting.
It is a duplex with 1 tenant, who has lived there for 15 years. And is paying approx $1600 a month in rent. And pay all of his own utilities. There is no HOA and its within an hour of a military base.
I will be using a VA loan with no money down. And the asking price is $240,000.
With what information i have gathered so far (waiting on agent to respond) and using the calculators here on BP. It would cash flow a negative amount of roughly $100 per month.
To me this seems like a no brainer. I buy and hold as intended. And after a year of owning it i qould be able to rent out the second unit. Therefore increasing the cash flow.
I know this is a rough estimate as more information is needed. But could i ask for advice, suggestions, questions i should ask or concerns i should have from all of the much more advanced members of the forum?
Omaha, NE · Member since 2020 · 612 posts · 665 votes
4y
If you can get the duplex under contract, it's a great purchase. All you'd have to do to build a comfortable income is buy one duplex every year for five years that repeated the soundness of the one you're considering now and you'd have a monthly cash flow of $6,000 with a robust savings for repair and maintenance.
You'd also have somewhere in the neighborhood of a half-million-dollar net worth, and all this without considering other sources of income like a W-2 or working spouse. Best of luck!
Omaha, NE · Member since 2020 · 612 posts · 665 votes
4y
If you can get the duplex under contract, it's a great purchase. All you'd have to do to build a comfortable income is buy one duplex every year for five years that repeated the soundness of the one you're considering now and you'd have a monthly cash flow of $6,000 with a robust savings for repair and maintenance.
You'd also have somewhere in the neighborhood of a half-million-dollar net worth, and all this without considering other sources of income like a W-2 or working spouse. Best of luck!
Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
4y
Sounds like a great purchase, as long as its a home you will be happy living in (or at least can tolerate living in while you fulfill the VA residency requirement). Best of luck!
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
4y
@James M Fario make sure to include a stipulation in the offer asking for the rent ledger and lease to be provided during due diligence. The rent ledger will permit you to verfiy if the tenant has been paying or not. It would be a shame to close on the property and find out the tenant hasn't been paying the last few months. If the tenant has indeed been there for 15 years, then usually it's a good indication he's been paying on time, nevertheless still include the stipulation. Also be mindful of the market, most properties are still selling well over list price, but obviously that depends on your specific market. Everything you have discussed makes this seem like a great deal. Best of luck!
Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes
4y
@James M Fario Sounds like a great first deal! House hacking with your VA loan is such a powerful strategy. I would get more info about the tenant, what market rent is for one side (so you know if you need to start raising rent), and what screening was used for that tenant. If he/she has been there for 15 years they probably love living there and are good tenants, but you just want to make sure.