First-Time Investor Seeking Advice on Purchasing an Old (1930s) Duplex in Texas

[Neal Daftary]

Hello everyone,

I'm a first-time investor and I'm looking at purchasing a duplex in Texas. I'd love to get some feedback and advice from more experienced investors. Here are the details of the property:

- Leased until July 2025: $1400 and $1450 per unit per month
- Built: 1930's
- Zoned O-2

Information in the Rental Report:

- Vacancy rate: 5%
- Purchase Price: $310,000
- Repairs and maintenance: 7%
- CapEx: 5%
- Property tax: $3,600 per year
- Insurance: $2,400 per year
- Roof: Broker mentioned it doesn't need immediate attention but will likely need replacement soon (~$15,000).
- Cash flow: The report shows a $177 monthly cash flow.
- Condition: The house is completely renovated. One HVAC was replaced and second one had fan motor replaced. 

I asked the broker about the electrical and plumbing systems. He mentioned that "some plumbing work" has been done, but he’s unsure about the electrical system.

Questions:
1. What are your thoughts on this deal, given the information above?
2. What additional questions should I ask the seller and the broker, especially for a property built in 1937?
3. What other aspects should I keep in mind and look out for in a property of this age and condition?

Any advice would be greatly appreciated. Thank you!

[Scott Mac]

It would be wise to order a home inspection from someone who does duplexes.

It would also be wise To order a sewer cam inspection.

It would also be wise to have a reputable roofing contractor who has been in business for several years walk the roof and give you an estimate.

With roofing there is no way to tell how long it will last but you can tell if it's worn out and needs replacement. A roofer can probably give you a guess at best. 

With the roof the other issue you have to consider is blow off. Where the winds strip shingles off of it. That could happen at anytime, and may be an insurance claim if enough come off.

If the home inspection does not address the electrical and plumbing enough you may wish to have an electrician and a plumber come in, for a fee, and have a look at your system.

Or you could just wing it and not do any of these things and hope for the best.

Good Luck!

Collecting the rent 1930's style.