Our first duplex acquisition - Minneapolis

[Geoffrey Serdar]

My First Duplex - Winter 2016

Any feedback, advice, stories, or jokes are well appreciated...

Hello, my name is Geoffrey Serdar, intro post located here.  I am closing on my first duplex acquisition in a few weeks.

The first duplex, listing here,  is in the Near North neighborhood of Minneapolis, or, as most would call it, the southern part of North Minneapolis.

• Negotiated Purchase Price: 
  • $149,000 
• Seller contributions towards buyer's closing costs:
  • $4410.00
• Taxes
  • $4,359.00
• 3 bed/1 bath/unit
• 2,964 total finished sqft
• 1913 built
• Many electrical updates
• Separate Furnaces
• Separately Metered
• Separate Water Heters
• Lot's of new windows
• New Roof

Property is a foreclosure, listed by Fannie Mae.  I visited the property on numerous occassions as soon as it came on market, a few days before Christmas Eve, I then submitted my offer on Christmas eve - late (around 11pm), I proceeded to negotiate on Christmas.  Best Christmas present I've ever received, and I still didn't get the deal done.  The negotiations was the only present I needed in 2015.  7 counters back and forth, Fannie Mae barely moves the first few days and every counter takes at least a day, Fannie Mae doesn't move quickly, and they barely gave into any of my negotiations.  To help my negotiations I paid for an overly-time-consuming homeowners course that took me three hours to complete, I wanted/needed to pay less than asking, I wanted Seller Contributions, and thus I did everything I could to get as much off as possible.  A list price of $151,900 - Purchase Price of $149,000 - $4,410 in contributions = a lot of money to me, that's an entire $7,310 I won't have to spend, yes I know that's pennies to some of you long money guys, but this is my first duplex and I'm very proud of that savings.

I purchased the property on a 203kFHA mortgage so I could roll into my rehab into the purchase.  Updating projects include:

• 2 x new kitchens
  • 2 new sets of appliances including plumbing for dishwashers (didn't have dishwashers)
• Building out washer/dryer laundry rooms off the kitchen, so tenants will have separate systems
• All basement windows will be replaced with glass block that can open (for venting)
• I'm tearing out all the gross drywall and crap in basement and starting fresh
• Updating bathrooms
  • Installing Glass Block in the bathroom windows
• Fixing a few windows
• Paint the whole damn thing inside and out
• Ripping off (and capping) the unused crumbling chimney
• Water management
  • Gutters installed with drain pipes so I get the water away from the perimeter
• Ripping out the carpet and refinishing the original hardwood - everywhere (if it's salvable)
• I am rebuilding a stairway making it safer
• A few other projects

Total price after all Rehab/Fees is approximately $210,000

I don't know what my rentals will be, I am going to begin marketing it @ $1,500.00/unit I believe I will be able to lease there, or at the lowest $1,300.00/unit (as is market values on craigslist and other sources)

The neighborhood is considered the good part of the rough area, lower owner-occupant, lot's of section 8 in surrounding areas.  This duplex is next to a Baptist Church, which I believe is a positive.

I'm very excited with this acquisition and believe I have the right mentality for land-lording.  I believe I am putting the updates into the right areas to achieve quality tenants, to secure high rental amounts, and to keep property mostly maintenance free.

What are your thoughts?  Any pointers?

- Geoffrey Serdar (The phonetic pronunciation of my name is JAh`free SIR-Dar)

 (hello.)