Duplex for $89900

[Rob Jones]

Hi Everyone,

I have been presented with an off-market deal by my realtor and I wanted to get everyone's input. 

Deal is below:

Solid Brick Duplex built in 1977

2 Bed/1 Bath per side

Currently rented on 1 side to the same tenant for 4 years at $500...not sure if they are month to month or yearly

Other side is recently vacant but was rented to same person for 8 years at $500

Will probably need a new roof in approximately 10 years

Will need new water heaters in less than 3 years

Asking price is $89,900.  This price includes new cabinets, counter-tops in kitchen and bath, stove, possibly fridge, paint throughout, new carpet and vinyl in side A(the vacant side).  Side B(the occupied side) was redone 4 years ago prior to the new tenant.

Once the new side is overhauled I am 100% positive I could place a tenant for $600 per month generating $1,100 per month in gross income.  The thing I am really worried about right now is the appraisal.  There aren't many comps to pull from and not more than 4 months ago a similar duplex(exact same floor plan and build year) that is a stone's throw away sold for $70k.  If the seller is firm at $89.9k I am highly doubtful that this one will appraise at that price or even close.  If this happens I won't be able to get financing.  To be quite honest I am comfortable paying the $89.9k because the numbers still work at that price but I would hate for a cash buyer to drop in and steal this because I cannot secure the financing.  Also, seeing that it is off market and has yet to be listed, I'm uncertain the seller would even entertain an offer in the $70k range right now.

@Jerry Padilla I will be talking to you about this one.  What are your thoughts?  Any additional input from anyone as to how I can make this work, thoughts, questions, concerns, etc. would be great!  Thanks in advance for the responses.