Is this still a good deal?

[Elizabeth Jimenez]

Looking for feedback on an Indianapolis duplex deal.

The property was listed at $155,000. We offered 150 came and they offer got accepted. The inspection found that the roof needs replacement, electrical updates are needed, and some support posts should be reinforced.

After negotiations, the seller agreed to reduce the price to $145,000.

I'm estimating about $15,000 in repairs, primarily for a new roof and electrical upgrades, bringing my total investment to around $160,000 all-in. Once completed, the property will have a brand-new roof and updated electrical, which should add value and reduce major maintenance concerns for years to come.

Expected rent is approximately $850 per unit ($1,700/month total).

Would you move forward with this deal at these numbers? Does spending $160,000 all-in for a property with a new roof and updated electrical still make sense from an investment standpoint?

[Drew Sygit]

Quote from @Elizabeth Jimenez:

Looking for feedback on an Indianapolis duplex deal.

The property was listed at $155,000. We offered 150 came and they offer got accepted. The inspection found that the roof needs replacement, electrical updates are needed, and some support posts should be reinforced.

After negotiations, the seller agreed to reduce the price to $145,000.

I'm estimating about $15,000 in repairs, primarily for a new roof and electrical upgrades, bringing my total investment to around $160,000 all-in. Once completed, the property will have a brand-new roof and updated electrical, which should add value and reduce major maintenance concerns for years to come.

Expected rent is approximately $850 per unit ($1,700/month total).

Would you move forward with this deal at these numbers? Does spending $160,000 all-in for a property with a new roof and updated electrical still make sense from an investment standpoint?

How are a new roof, updated electrical and support post reinforcement going to increase rents?

Answer: tenants won't care.

How many rentals do you currently have and for how long?

I'm guessing none, or some for only a short time.

To MAKE MONEY as a  landlord, you need to squeeze every drop of usefulness out of stuff before replacing them!

Especially stuff that doesn't directly impact a tenant's use of their home.

Too many landlords think they have to replace and update everything - WRONG!

First you have to determine how it impacts the tenant.

Then you study the market to learn how to, "Maintain to the Market". 

EXAMPLE: If 80%+ of competing duplexes all have kitchens that are 20+ years old, what ROI benefit will you get out of updating yours?
- at best you'll usually only get 1-5% more in rent, which usually is not enough to recoup the cost, AND you're property may rent faster.

So, find out if the electrical system is a hazard or is it fine the way it is.

Find out how long the roof will last with patching.

Check out if the support posts really need reinforcement or if they've been that way for decades. NOTE: this is the biggest concern of the 3 you brought up.

FYI: I'm not suggesting being a slumlord, which is why I repeated that you should consider the impact on a tenant's use of their home. 

@Caleb Brown, @Arman Ahmed, what do you guys think?