All Forum Posts by: Nathan Peatrowsky

Keep rents at fair market value and you will get there even sooner! Keep it up.

Get an appraisal, get a home equity line of credit, buy more properties. 

You need to get more information from other sources as you are doing. Base price you can pay on your desired return. If you can get a bank loan, it will be better than owner financing probably, but doesn't hurt to negotiate. 

Update:

Spoke with the property management: rent is 675 lower unit (vacant) and 722 upper unit (6 people living there?) 

Took some notes:

Gutter - front and back had small section hanging off.

Roof - good condition

Siding - good condition

Front Patio - Needs paint, is wood deck built over concrete steps

Back Fence, Side Fence - Chain link with sections broken

Tree stumps - 3 eventually need removal

side window - taped over crack needs replacement (I don't think repair is possible on this)

Bottom windows (2) new suggests they were broken 1 is sealed over with plywood&painted

There is more, the basement carpet is wrecked. It could be laminated or tile in the kitchen area. Everything needs repainting. Heating unit, fridge and stove seem old but work. Upper unit had an attempted break in and the back door was busted open and now blocked off. Lower unit had been broken into in past, has a no trespassing sign on it. Entire upper unit needs painting and carpet cleaning, but current tenants are fine with it and have lived there 5 years.

Overall the property is in rough condition. 80k is way too high. I will talk to the owner and see how he takes a low offer. I believe break-ins could be prevent and deterred by:

1. Deadbolts on all doors

2. Motion sensor lights on corners

3. Security monitoring sign in yard

I don't think this is a property I want to get involved with unless the price is significantly reduced. 

You are in this far, you should stick with it. Work hard to keep vacancy low, build up an emergency fund. 

Do not forget the tax advantages that owning rental property brings. Selling now won't get you any farther. 

Say after all costs you are in at 60k. You rent at 750/month. If about half your rent goes to expenses you have a NOI of 375/month = 4500/year. Cap rate = 7.5%

Also, you could have roofing done while a tenant is renting shouldn't be too big of a deal. 

I got in touch with the property management. The lower unit is currently vacant after doing repairs. The upper unit is rented at 722/month and they are asking 675 for the lower unit. This is about 1400/month which is much lower than the owner stated. Could have been a typo.

I am going to be getting a tour of the property tomorrow (Friday) at 2 if you want to come. 

I agree, the rent seems very high especially for the area (north side). This will be cleared up when I find out who the property manager is and get a look at the agreements.

Each unit is 2 bed, 1 bath and the owner says around 1000 ft^2, but I think the area estimate is very high. Overall 80k should be a good deal though.  Would it be worth having an appraiser come in and making my offer contingent on the appraisal? 

I read your bio. Do you manage your own properties? 

Hello!

I am currently looking at a Duplex with 2 tenants in place. The asking price is 83500 and gross monthly rent is 1700. On paper this deal looks fantastic.

I am currently a student thus no steady income to easily acquire a conventional mortgage. I have money for nearly a 10% down payment and have a feeling the property will be appraised over the asking price which I can use as leverage toward a down payment. I will first try to get seller financing. If he wants to get out of the property now this will not work and I will move onto a portfolio lender.

I am going to be taking a closer look at the property and meeting with the owner in the next couple days. I plan to ask about: rental agreements, tenant history, property taxes, squarefoot and bed/baths.

The property is currently managed by a property manager and going rates are 10% of rent. I am sure there is some work to be done on the place. 

Do I need to worry about renters security deposits?

I need advice on getting financing. 

How do I make an offer? Do we need to go to the title and escrow only when a price is agreed on?