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Updated about 10 years ago on . Most recent reply

User Stats

49
Posts
12
Votes
Rob Gleason
  • Investor
  • Atlanta, GA
12
Votes |
49
Posts

Newbie - bagged our 2nd duplex ;)

Rob Gleason
  • Investor
  • Atlanta, GA
Posted

We just closed on our second duplex!  I wanted to wait a little longer to build up our cash reserves a little bit but this deal popped up: duplex built in 1978, 2 beds/1bath each side, fully rented, 5 minutes from our first duplex, retired out of town owner.  It was on the market for 3 or 4 months and the asking price dropped so I figured they were getting a little anxious.  Sent my inspector in and he came back with a laundry list of repairs which I had my agent forward to the owner along with a lowball offer of $40k cash.  He countered at $45k and we closed within a week.

Here's the break down: 

  • Purchase price + closing - 46,400
  • Immediate repairs            -     700
  •                     Total cost.      47,100
Current rents ($450/side) =.   $900 month Expenses
  • Insurance                            -  63
  • Taxes                                   - 58
  • Management.                      - n/a
  • Maintenance.                       - 60
  • Water/sewer.                        -60
  • Mortgage.                            - 0
  • HOA. - 0
  • Vacancy 10%.                     - 90
  • Repairs 10%.                      - 90
Total monthly expense              421 Cash flow.              $479 mo =  $5748 annual = 12% cap rate The plan is to defer other repairs/ updatesuntil current tenants move out.  Budget $4k per side and we're sure we could get $500 maybe $550 per side.  Section 8 in the area pays $725 for 2br/1ba so we're thinking about doing that.  Any thought on section 8 tenants?

Most Popular Reply

User Stats

7,730
Posts
2,248
Votes
Paul Timmins#2 New Member Introductions Contributor
  • Specialist
  • Rockland, MA
2,248
Votes |
7,730
Posts
Paul Timmins#2 New Member Introductions Contributor
  • Specialist
  • Rockland, MA
Replied

@Rob Gleason 

Congrats.

You can call the local Sec 8 office ask their requirements ask to call some current landlords and see what their experience is.

Section 8 are more labor intensive go to IREM.org search for ARM certified property managers that handle section 8. Call 5 ask them ow they select and what issues come up.

Paul

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