Duplex in B Neighborhood - First Property

[Billy Holt]

Hey BP, 

Looking for advice on getting my first property in Roseville, Michigan. It's a side by side ranch duplex near Gratiot listed at $110k. Rents in the area are pretty much all at 700/unit. It's on a slab, no basement, new roof and new windows. Currently rented to long term tenants of 4 and 8 years (both smoke and are pretty messy) paying 700 and 750/mn. Based on my numbers, it should cash flow pretty well (a few hundred)

My real estate agent has some hesitations as he thinks rents will pretty much be capped at 700, it's not in the most desirable area (more of a rental area), and my tenants won't be A+ tenants for that price point. While I would love a place in a more desirable area, the numbers just don't work for places like Ferndale, Royal Oak, Livonia, and the like. 

Pros: low maintenance, low price tag, positive cashflow

Cons: rents capped at 700/mn, not going to bring in rock star tenants, not the most desirable area

Thanks for the help!

[Christian Hutchinson]

I have a side by side brick duplex in Roseville. Its a 2/1 and a 1/1 with a basement, seperate drives with a garage

I think I know what property you are talking about.  I know several of the MFH in that part of Roseville have those 1950s oil burning furnaces, they are at their service life, so it dies it dies.

Also, you will need to put in Central Air I would guess.

I get $850 and $725 for my units.  The type of tenants you get are service workers at Medical Facilities, Labor Technicians, Tier II wage earners in the various UAW Plants.  Basically people making $14-$22/hr.

Also, those properties are not worth $110K even remotely, we bought our place in 2014 they wanted 92K and we ended up buying at 67K, and the property only appraised for 62K.  The numbers were still worth it though.