Looking Opinions On Oregon Duplex

[Zach Davis]

Hey guys, I was hoping to get some feedback on this duplex.

http://rmls.com/report/13396573

The property’s been on the market for around a year and has had only one real offer that fell through. They’re currently asking $170k which is down from $180k 6 months or so ago, the current owners bought it in 2001 for $145k. Both units are two bedroom one bath and would rent for between $725 and $750 per month per unit, they are currently both rented month to month for $700 each. It’s in a cluster of small, mostly well maintained multi-family properties surrounded by single family homes but this one is somewhat of a trouble building in the neighborhood. Initial assessment on that: it doesn’t seem to be the current tenants but the overgrown landscaping and poor lighting that welcomes the trouble element. The idea would be conventional investment property financing with 20% down and probably offering somewhere in the neighborhood of $150k-$160k. I haven’t been able to get ahold of a broker as of yet to determine the exact rate I’d be looking at but my initial knee-jerk figures say I’d be barely cash flowing based on the 50% rule and would probably cash flow $80-$100 per unit in 1-2 years. Certainly not a money maker but my idea is that getting my foot in the door and gaining the experience might be the more important consideration for the time being. Maybe I’m wrong on that? Hoping for feedback on that as well.

I have run this by my father in-law, who is a successful multifamily investor. His input was that on your first small rental property anything that doesn’t lose you money every month is a good deal just for the tax shelter… Thoughts on that? Thanks in advance for your input.