53k Duplex need advice

[Derek Woods]

Alright, I'm currently looking at a duplex for 53k.  Not to rough inside but it does need a new roof  and gutters ASAP and Central heat and air installed.  Windows need updated aswell. 

Privacy fence needs panels replaced and the porch needs painted.

Currently rents for $825 a month total.  With central heat and air $1200-$1250 should be easily done.

The current owner is interested in seller financing the deal or atleast part of it.

I feel as though I'll have close to 70k in at after all repairs and updates.  It should definately be at $1200 then.

Does this sound like an OK deal or a pass??

Thanks.

[Bill Jacobsen]

It sounds OK to me.  I base that on requiring an 8 cap. assuming a 50% expense ratio and a 16 cap on the additional rent that you create.  It is my opinion that you should not pay full price for the extra rent that you create.  I value it at 1/2 price.

To me, financing is only a factor if it is below or above market rate.

Good Luck.

Bill