Analysis for Duplex

[Jonathan Makovsky]

I am still a RE virgin with no properties under my belt, so please feel free to punch as many holes in this analysis as possible:

Background: There is a duplex in probate that the previous owner lived in the duplex and passed 4 months ago. The children of the estate live out-of-state, and the house has been listed for about a month (supposedly) without an offer on it according to my buyer's agent. The other tenant is in the process of being evicted, and we cannot get into that unit. I am hoping that because of the situation the estate might be motivated to sell quickly.

Property: The place looks like it's in good working condition (new boilers, oil tank), but needs updating especially to the kitchen cabinets and oven. In this area no fancy kitchens needs to be put in. I have not seen the other unit yet, but it was supposedly in good shape (and I would like to include a contingency clause in the P&S agreement to reflect this).

Offer: They are asking $150, and I would come in with an all cash offer of just under $90K and a quick closing period to entice the owners (is the all cash offer necessary?). I expect that the place will need another $15K, so an all-in price of $105K - $110K. (After 3 months, I would like to apply for traditional financing when the property is stabilized.)

Numbers: From the research I've done, I believe I can fill each of the two units for $875/month ($1,750 total). The property taxes are pretty steep ($4,100). The property is heated with oil and has separate boilers, and separate electric meters. I will pay the hot water and water bill.

Thanks in advance for reading and appreciate your suggestions.