WA State Duplex Analysis

[Robert Harpster]

New here and seeking comments on a 1200 sq. ft duplex (2BR/1BA with single garage  each and 600 sq. ft) built in 1946. Asking price $179k. Rents are $600/$575 and under-market by $200 each. Property tax is $100 per month. Tenants have been in over 5 years with no increases. I would like to get for $165k with $30k down and raise rents to $750 each which is market. Cash flow between $700-800 per month. Thoughts?

[Justin Frank]

Hi @Robert Harpster

This deal sounds okay at best. If you purchase at $165k and you can raise rents to $750/unit you cash flow will be decent but one thing I would consider is that you are trapping $30k of your own money into a 1200 sqft building that was built in 1946. Did you consider lead paint, old plumbing, old water pipes, how is this building heated/cooled, and how old is the heating cooling? Where is the building located? This can make a huge difference in whether or not this is a good deal. $165k in the Seattle area i would do all day long regardless of my previous mentions. $165k in Eatonville I may walk away. Also, i always ask what your goals are? Does this match your goals? It doesn’t fit with mine. I don’t want to own a small duplex built in 46. Unless it was in the middle of a booming city. Hope this helps a bit. If you have more specific questions feel free to ask. It’s always hard to give an opinion when folks post a few numbers and want to know if it’s a good deal. There is so much more that goes into it. Good luck.