First Purchase Completed!!! Buy and Hold Duplex in Philadelphia

[Nicholas Kurowski]

Good Evening BP,

I have recently completed the purchase of my first Buy and Hold Property in Philadelphia.

The property is a 2 bed/1 bath (ea. unit) duplex. The property was an estate sale and the listing agent happened to work with my agent so I was able to get in for the first showing and therefore make the first offer. 

The property was listed for $199,500 and cosmetically has been updated inside and out. I won't have to put more than $300 into the property to start. All CapEx, except the roof, is at least 10 yrs out should nothing break prior to its useful life (however I will account for this). The roof has 6 to 7 more yrs left before it needs to be replaced. Taxes are $2490/yr. Insurance is $1179/yr. Current tenant has been renting the upstairs unit for the past 15 years and pays $950 plus all utilities. Downstairs property is vacant but the listing agent had already received 5 calls prior to closing with interest in renting (they will all be screened thoroughly). Downstairs unit will rent for $950 as well.

I offered $182,500 on the property. After several other offers, the sellers came back and offered me the property, take it or leave it, at $189,000 due to my being the first offer they received.  I agreed to purchase for that amount.

Home inspection was perfect. Only minor items (ie. GFCI installation, leaking faucet in kitchen, etc..).

The home appraised for $200,000. 

I was able to secure a 5% down first time home buyer mortgage at 3.865% interest/360 months.  A stipulation is that I live in the property for at least 60 days.  I will move in for 60 days then move back into my old apartment which I will sublet for those 60 days. I have cleared this with the bank and there won't be an issue no longer occupying the property after that time.

I should cashflow, before vacancy rate and CapEx are taken into account, above $600 per month.

Let me know what you think. I am very excited to get started in Real Estate and look to continue to expand.

Thanks for reading.