Is This A Deal?
I have located a duplex in town. Asking Price is 275k. one side is rented for 650/mo and the other side is rented for 450/mo. Rents are signifigantly below market value (should be at least 900/mo. in this area, probably even more).
The house has little if no curb appeal. The house is destroyed inside. The hardwood floors look to be in good shape, and the unit has a new roof, heating and AC. Thats about it. The unit needs to be gutted, and windows need to be replaced. I figure the unit in its current condition, it is worth no more than 200k, with FMV or the rehabbed unit worth around 325k, after the expected 40k in repairs.
I want to put an offer in for 200-210k, and if this works out and my offer gets accepted, I can make around 70k on this deal.
But here is my problem. First off, how do I deal with the current tenet? (one is a family member who will be leaving upon closing, the other has a lease until july). Should I rehab one side, find a tenent for it and then rehab the other side when he moves out?
Secondly, I have very little cash to rehab the place. Do you guys know any mechanism other than credit cards, where I can find this cash? Something along the lines of making my offer 250k with a check for 40k waiting for me at closing? Is that something that happens often?
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