D+/C- neighborhood, Cashflow Duplex? Prop Manage it?

[Justin Hennig]

Foreclosure Duplex, Zestimate $122k, Purchase price, $85,000. Last time it sold at this price was 1998. Needs about $15,000 in repairs and upgrades to update somewhat and add a bedroom to each. Needs a new boiler, paint, remove carpet upstairs to expose HW floors there, needs 2 refrig, 2 stove, and may add dishwasher in 1 or both. Older house (1904) with Hardwood floors, original woodwork, French doors to Sunrooms on front of each, flaking paint on outside would need new siding or scrape/paint within a few years. Currently 2 bedroom 1 bath on both sides but has room to make into two 3 bedroom, 1 bath units...each unit is 1150 finished square feet.

Prevailing rents around 900-1150 for 3 bedrooms so gross rent would be around 1900-2300 per month. I'd upgrade it enough to possibly fetch 1000-1100 each side so would meet the 2% rule.

25% down = $21,250 (seller paid CC) + 15000 repairs = $36,250 cash needed.

Taxes $2100, Approx Insurance $1800/year, estimating 10% for property management, 5% for repairs, 8% vacancy,5% capex, tenants pay all utilities.

This Up/Down duplex is in a borderline sketchy neighborhood and its 25+ minutes from my house. I'd like to manage anything within 10 minutes in nicer neighborhoods, so this one because of the neighborhood and proximity seems to make more sense under management.

I've never hired a property management company before and would love to get some advice just about that.

What do you think and what questions do you have?

thanks!

Justin

515-868-6886