Posted by phil fernandez on December 14, 2003 at 19:54:03:
And remember with the upcoming inspection you will probably have a grocery list of things wrong with the duplex to where you can re open negotiations.
Good luck.
1st Rental - Duplex … Will it work ? - Posted by FloridaNewbie
Posted by FloridaNewbie on December 13, 2003 at 23:20:03:
I have a deal to purchase a duplex built in 1915 for $69,000. Appraised for 70,000 over a yr ago. The asking price was $74,900. The seller (also a realtor) says the tenants are paying $150/$125 weekly (utilities all included). Power on separate meters but nothing else. What does it take to separate gas/water etc… ? Seller selling because she does not want to deal with tenants. Should I request a copy of lease aggrements prior to purchase? I will put down 10% and finance the rest @ approx 5.5% for 15 yrs. There should approx $330/month positive cash flow. The age of this frame constructed duplex in addition to the seller’s disclosure stating a recent termite treatment concern me. Contract is wtitten “as is” with right to inspect. My goal is to buy one to two rentals/yr w/15 yr fixed mortgages for retirement income but a property this old w/potential termite problems has me re-thinking my offer. Or, am I just experiencing “cold feet” ?
Thanks in advance for any advice ! FloridaNewbie
Re: 1st Rental - Duplex … Will it work ? - Posted by E.Eka
Posted by E.Eka on December 15, 2003 at 11:26:29:
Weekly payments? It sounds like a rooming or half way house. I wouldn’t want to deal with that stuff. Why pay retail for a place that may have defects. An inspection will uncover problems which would help with negotiations.
Re: 1st Rental - Duplex … Will it work ? - Posted by phil fernandez
Posted by phil fernandez on December 14, 2003 at 18:11:51:
I’d want to get a termite inspection before I proceeded further. Or better yet, get the seller to get a termite inspection on his dime.
The other thing that is bothering me here is that you say there is an appraisal for $70,000 and you are buying at $69,000 ( which really is $70,000 ). WE as investors usually have to buy below 100% FMV. As Joe Kaiser says, the top 20% of value might be air.
Re: 1st Rental - Duplex … Will it work ? - Posted by JoeKaiser
Posted by JoeKaiser on December 13, 2003 at 23:43:21:
Tenants who pay weekly are not tenants you want. There’s a
reason they’re paying weekly, and it’s likely not because they find
it more convenient.
If you want to pay full price, you can buy any house on the block,
so why not pick something that’s tidy and pretty and well located
and is in perfect shape?
Joe
Re: 1st Rental - Duplex … Will it work ? - Posted by FloridaNewbie
Posted by FloridaNewbie on December 14, 2003 at 19:28:44:
Thanks for your comments/suggestions. Yes, I agree I’m paying retail, 1st offer was $63,000. It’s unusual to find a multi-family that doesn’t need rehab, in a clean area in Central Florida w/positive cash flow. I guess that’s part of the reason I’m questioning the deal. I can still back out … the inspection will provide more info. Thanks.