Duplex purchase in Red Lion PA

[Shawn Ginder]

I am considering a duplex purchase in Red Lion PA looking for any advice on the area for a rental and any other tips you have as I analyse the deal.

Here are the details:

On North Main street in Red Lion, PA - Dallastown school district.

Buying through a wholesaler who is helping a friend out with the sale.

Each unit rents for $850 a month - $1700 month income

Each unit 3 bedroom 1.5 baths

1288 Sq ft per unit

Currently both rented, with tenant who plan to stay long term, one tenant as been there 6-7 yrs. Tenant history treats property like there own, consistent paying tenants.

Purchase price $115k

Seller will hold financing on 25% for down payment at 5% for 3 yrs interest only.

Property will need about 10k in cosmetic work, seller willing to add in 10k cash back for repairs added to the seller financing agreement.

Have a lender in place who can finance this deal at 75% with seller financing in second lien position.

$3500 taxes

$800 insurance

Tenants pay all utilities

Would be getting a commercial loan amortised over 20yr.

Plan to use management team at 6%, that we are using on another property.

What are your thoughts and perspectives on a deal like this?

No money in on the deal but looking at over $200 net cash flow, with capital given at settlement for immediate repairs that need addressed.