Cleveland Duplex Rehab for Rental, etc.
Ive been saving for a few years and just got back from Afghanistan so I want to purchase a duplex and over the next year add unto three. Based on the market for a solid starting point Im looking at around total budget of $40-45k to purchase and rehab a place that puts out about $550 per unit at $1100/month.
I would be paying cash, yearly taxes vary from $1800-$3000/year. I will screen and place tenants personally for the first two years.
So finances in abstract look like this. $45,000 in. (20/25k break down between purchase and rehab.)
$1,100.00x12 = $13,200
$13,200 - (3k tax, 3k maintenance, 1k landlords insurance, 1k misc expenses)
$5,200 gross profit per year. Pays off in 9 years.
Im looking at MLS, craigslist, fannie mae, freddie mac, hud and word of mouth. Any other outlets I should consider? Other advice. I plan to let that first property add up rent for a year while I get another one up to speed and depending on cash flow, cash balance and how solid I am feeling with the tenants I have and the character of the houses I bought (are they sucking more or less money to maintain as I expected?). After a year or two I can use cash and leverage each asset by maybe 50% of appraised value to make a bigger purchase of perhaps a larger multi unit property etc.
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Find local people in your local market by going to 3 different REIA. The ammount of information and contacts you will meet may just blow your mind.