First MultiFamily Purchase...or maybe Wholesale.

[Nick Thomas]

I'm a novice investor in real estate and am looking at a multi-family property in Greenville, NC. I am needing some help to analyze a "deal." I am looking at this duplex for $12,500 (Will offer less for sure). All units are currently vacant and in need of rehab. The area is not in the nicest area of town, but it certainly is not a warzone so to speak (None in this city at all). The assigned school is one of the rougher ones, but not the roughest, and the district will soon be switching to open enrollment anyhow. Each unit is 2 bdr and 1 bath which I believe could easily rent for $500 per month. The ARV is 45,000. I am considering buying this for myself to rent, but thinking I might try to wholesale since I am moving to a different state in the upcoming months.

Any thoughts on what to look for before making an offer? What should I look at that would skyrocket rehab price? I am not sure the margin would be high enough for someone to bother flipping this property, there would be profit but only about 10-20k I imagine. I think it'd be a great buy and hold with decent cashflow though.

Thanks for your input,

Nick Thomas

[Jon H.]

@Nick Thomas  Hey Nick here are some items you should look for when walking through (with seller hopefully)!

Important question to ask the seller, "What type of repairs are needed on the home that I should know about".  Very important that you ask this question.

When walking through the property, Look for a functional layout, Roof condition, Type of plumbing  Galvanized, Copper, plastic?  Soft floor around toilets, tubs, & appliances bounce on your toes in those areas.   Check for construction materials that might have asbestos, Popcorn ceiling, old flooring, siding.  Check if wiring system is knob & Tube, Aluminum, fuses?   Those are some of the major areas.  Some things look really bad on the surface but are easy cleanup.   This is where you can create value!

You can download a house inspection sheet from google or read J Scotts book on  Estimating rehab cost.

Lastly do you really want to become a long distance landlord on your first deal?  An assignment will probably be your best option!

Good Luck