Advice on possible deal

[Marcelo Ricarte]

Hello BP Family, 

My wife and I are looking to buy a duplex using an FHA in South FL. Property seems to have lots of potential but we're not very sure. Numbers, to be honest with you, don't really seem to be working out (perhaps we're missing something?). We thought of reaching out to you guys maybe you have a different perspective and/or can give us an advice or point of view?

Thanks in advance before anything!

Its a 4/2 and 3/2 duplex asking price $349,900. just reduced 20k, 60 days in the market

Its a B or B+ area, schools are pretty good (considering schools in South FL), rents are way undervalued (a 4/2 can be easy rented for $2200 and a 3/2 around $1800), right now they're $1450 and $1350 mo to mo.

We thought that we can be hacking it but we have to lock one side's rent with a one year lease so we can qualify with the income, so according to our calculations we'd have to come up with around $1600/mo to cover operating costs for that first year before we can raise it to $2200.

Additional data:

My wife is a realtor so we'll try to factor in her commision on the purchase.

To us, the property is underpriced based on past sales comps (estimated price $420k).

We'll offer $340k and based on pictures (we have an appointment this saturday to go see it), it doesn't need much updating, probably $10k.

Anyways, I know is long and I don't mean to put you to work but any advice will be very very appreciated.

Thanks again.

Marcelo and Giselle.

[Ralph R.]

@Marcelo Ricarte  before you offer plug all the numbers into a rental calculator here on BP. Be sure to get real numbers. Taxes are public but likely will change when you buy it. Call an agent and get a quote for insurance. Make your offer contingent on your due dilligance and an inspection by a home inspector as well as your personal inspection after the tenants leave. If they stay then make sure they are aware the rent is going up to market rent. Get them to sign an E-stopple agreement. Use real numbers not estimates whenever you can for the due dilligance. If your in doubt post them here for some feedback. Speak to who ever is going to be your Pm about market rent and expected vacancy. Put a figure in the calculator for maintance cap ex and repairs. By the time you put all those numbers together you should have a better idea if you want it or not.   RR