Duplex Lead from SFR marketing. . . now what?

[Michael B.]

Hello BP comrades,

Just did a marketing mailing in Seattle looking for SFRs to wholesale and received a call from a duplex owner.

Seller owes only $75,000 on it. One unit rents for $1200 and the other one (which he is in the process of renovating) he will rent for $1800. The unit renting for $1200 has not been renovated since the building was built in 1991 and these tenants have been in there for 6-8 years. Market rents in the area are an average of $1800 with $2300 at the high end and these are under market. Each unit is 3 br/2 ba.

He wants to sell and his wife wants to hold. I don't think this bodes well for owner financing  (or motivation) but I haven't made the ask yet because I'm first deciding what I want to do with this. 

Very few comps but there's one very similar that sold for $437,000. 

Do I want to:

a) Make an offer at, say, $430k and keep it for myself either with owner financing or conventional financing? Judging from the exterior, I think I would need to put $15k into it (carpet, paint, appliances, some landscaping). Buy/hold is not my current strategy.

b) Wholesale it to a buy/hold investor or local landlords?

c) Get it under contract and then list it on the MLS and see what the market will pay?

Any advice is appreciated. I don't want to "waste" a potential lead.

Thanks!

Michael

[Mike M.]

$430K for $3000/mo in income doesn't sound like much meat on the bone at the end if the day. Exit strategies with a duplex are less than a SFR as well. Do the financials work for you? Not all properties are good investments, even ones that are generally considered to be investment grade (like duplexes). Good luck.