Looking for help on this deal. Thanks.

[Adam Robin]

I was hoping to find some people to bounce around discussion about this deal. I’ve only bought and sold one property so I am still learning. The seller has two identical doubles for sale (3 bedroom / 2 bathroom per side). I would be interested in buying both of them. I’ve figured a price that I feel would be a reasonable offer, but I was hoping to hear from some more experienced investors first. What would you pay for this deal? Any help, advice, thoughts, or tips would be greatly appreciated. Thanks in advanced. 

https://www.zillow.com/homedetails/1510-Numa-St-New-Orleans-LA-70114/149053233_zpid/

Rents: $1,000 per side ($4000 total)

Insurance: $4386 annually

Taxes: $2,824

Management: 10%

Maintenance and CapEx can only be estimated so I'll leave that to you. Property is in excellent condition.

[Braden Smith]

Hey @Adam Robin. As @Kimberly Jones mentioned I'm both an investor and a realtor here in the New Orleans area. I can offer you some insight, as follows:

That area between LB Landry and Shirley Drive in Algiers is a rough neighborhood which equates to low quality tenants and more problems. You will have higher turn over there also.

That property at 1510-12 Numa has been on the MLS for 257 days.

The one next door at 1504-06 Numa has been on the MLS for 258 days.

That's a very, very long time for anything to be on the MLS around here. We have a very strong sellers market in New Orleans with the vast majority of properties being sold in 90 days or less. If a property has been on the market that long, there is a reason. It is usually due to the property being overpriced, the property being in a rough area, the property having some major issues, or some combination of those things.

Neither listing has any interior pictures. There is usually a reason for this...

Rents in the New Orleans area average $1 per square foot. These units are being rented out at $0.69/sf, which is well below the average. There is a reason for this and it isn't a good thing. As @Mike Wood mentioned you can get more than that with Section 8.

Taxes for 1510-12 Numa for 2018 were $2501. 

Taxes for 1504-06 Numa were also $2501. 

Total tax for both is $5002 per year.

Average property values are down in Orleans Parish. We finished out 2017 about 3.5% down, with some areas down as much as 8% or more. I wouldn't bet on appreciation in that area.

Here are the stats for 70114:

ZIPCODE:  70114

2016 Total sales:  98

2016 Average price/sq ft:  $116.95

2017 Average price/sq ft:  $116.55

ZIP CODE:  70114

2016 Average price:  $196,448

2017 Total sales:  138

2017 Average price:  $200,824

% Change in price/sq ft:  -0.30%

Kimberly is also right when she said, "you are going to find a hard time finding anything on the MLS these days". Our market is completely saturated with investors and wannabe investors. The competition is insane here. There are no good deals to be found on the MLS in our area. I haven't picked up an investment property off the MLS in about two years, maybe more.

It is also very difficult to get anything to cash flow in our area that is under 4 units. The prices are just too high to make them work.

If you plan to finance these deals, how much do you plan to put down?

Let's say you put 5% down on each... that's $16,000 out of your pocket, plus closing costs. Buyer side closing costs are usually in the 3-5% range in our area. Let's call it 3%... that's another $9600. You may as well just round that to $10,000. So you are looking at $26,000 down at a minimum.

Rents are $1000 per unit for 4 units so that is $4000 per month. Subtract out your vacancy rate of 10% ($400) and another 5% for repairs and maintenance ($200) and that leaves you with $3400. If you are going to use a property management company you can figure about 10% to them, which leaves you with $3000 per month. 

The note on $320,000 is going to run about $2500, so that leaves you with maybe $500 of net income per month. That equates to about $125 per month, per door. Doesn't seem worth it to me...