Thinking About a Duplex in Alabama

[Frank Jones]

Looking for opinions...We're looking at making our first RE, all cash investment purchase of a duplex in north central Alabama. The duplex is all brick, built in 1985. each side is 2 bedroom, 1 bath, about 875 sq. ft. per side. Needs minor work and some landscaping on the outside. One side will need outside unit HVAC replaced in a couple of years. Roofs are good but these units have only had what they absolutely had to have since they were built. Both sides currently rented at $375 mo. which is $25 to $50 under the money in this area. Very little inventory in this type of property in this small town. Great school district, very decent, low crime area. 

They are asking $99K, I have offered my max bid at $82,500.

What do ya'll think?

[Adrian Stamer]

an all cash purchase of a duplex making $750- 850 a month is a pretty lousy ROI at $82k

50% rule would put you at a bit over $5k net a year so off $82k that's around 6% ROI. Certainly better then a savings account, but with actually leverage you would see considerably better returns, though still lower then I would personally consider