First deal: duplex, 3 bed, 1.5 bath per side in Wisconsin

[Adam Jeske]

Alright, stuff is getting real...

Just outside Madison, WI (good job market with big university, government, and growth, low vacancy), in a small town that has vacancy of under 2% and fantastic schools. My kids are in this district, and I think it's going to stay strong, with both rental and price appreciation for several years, at least.

Not many multi-family properties in the town.

The deal is 215K for a 3 bed, 1.5 bath duplex, with one half just renovated like new. There is no garage and no basement, but lots of good closet space and a laundry/utility room with some storage. There's no garage, which is a bummer in Wisconsin, but also not that uncommon. It has a nice yard and backs to a park. Central air. Not sure about the age of the AC but the water heater (gas) and the furnace (gas) are old--1994.

The owners inherited it and want to move it. It just went on the market, but their agent says they have a lot of interest.

Asking price is 215K. I'm expecting 220K after closing costs and a bit of renovation on the side that's not been done.

The unrenovated identical duplex next door rents for 900, but that also has a 1-car garage.

There's an open house today.

I should not have a problem with the down payment and the financing. I'm happy with the return, and this feels like a safe way to start my portfolio.

Thoughts? What else do you need to know?

Thanks!

[Kevin Siedlecki]

@Michael Braatz's list of what else you need to know is good. In my market, this house would lose money at the numbers you've described. I'm working with some of the highest property taxes in the country, though, so you might be in better shape in WI. 

@Adam Jeske I think you might need to tap the brakes on this deal and learn a little more before you make a purchase. I wrote a blog post a while back about initial analysis of a multifamily. Take a look:

https://www.biggerpockets.com/blogs/6815/45137-my-...

Hope it helps! Shoot me a message if you want to talk further. I love talking through deals!