Good Deal ? ? ?
Duplex near me in a pretty good rental area. Walking distance to a park, police station, United Dairy Famers, and busline. Built in 1900, and had one owner for the last 30 years or so. She didn't do much updating at all, but the overall building looks to be in pretty decent condition for its age. Most of the repairs would be cosmetic, carpet, and updating the kitchen and bath.
Well she died, renters moved out, and her daughter who lives out of town is now left with the property. She wants to sell period. It's been on the market for 2 months, but I just found it yesterday. Original asking price was 79k and they've already dropped it to 65k. Mortgage is completely paid off.
I would have to have a realtor pull comps for me but my guess is ARV around 120-140. Regardless, you could rent each unit for 500.
Asking price 65k
Semi-annual taxes 741
Rent per unit 500
Insurance ???
Repairs 15-20k
Building has newer furnace, new roof, a few of the windows have been updated. It does not have air conditioning, and just 1 furnace. New electrical boxes, and some new wiring, but I couldn't tell if the whole place had updated wiring. I did see some knob and tube though.
Just curioius, what would you offer?
How many units? % Occupancy? How much would it cost to rehab it? Find out the insurance cost.
If these check out, I'd offer 50 and expect 55-60.
What part of the country are you in?
Realize that anything that has been on the market two months and has had to have a price reduction, is probably over priced.
Ask the realtor and owner if they had any other offers and did they have an inspection and if they did what did the inspection reveal? Definately get the owners to complete a very detail sellers disclosure.
Make your contract contingent on a satisfactory inspection within the next 20 days.
You need to do your diigence on this one or you could get burned. A 1900 house with no updates could be in the 20-40 repair range.
1) termite and wood destroying organism inspection
2) building inspection for the roof, electric, plumbing, septic, foundation, siding, appliances, bathrooms, windows, etc.
We're in south west Ohio. What I was thinking is that we take a slow walk through and get an itemized list of what it would take to fix/update this building, insure it, rent it, manage it and so forth. Then submit that with our low offer and see if they bite. My gut says we offer something in the 40k range. Of course it will depend on what the electrical situation is, and other inspection items.