Updated almost 9 years ago on . Most recent reply
First deal (a duplex) under contract! Want some feedback!
Hello BiggerPockets!
After reading a few books and lurking way too much on this site. I decided recently to take the plunge. Now I'm under contract on my first investment home! Strategy for this is a long (5-10 year) term buy and hold with cash flow. Would love to get some thoughts and feedback on it before I actually pull the trigger.
Location: Atlanta, GA (where I'm based). Class C area.
Type: Duplex, each side a 2/1.
Occupancy: Both units occupied, each with long term tenants. One that's been there 40(!!) years.
Purchase price: 74k (cash), will cash out refi when possible.
Rent: 600 each side, 1200 combined. I think this can go a bit higher, but want to be careful with long term stable tenants.
Utilities: Landlord pays water. Currently about $150/mo. Would like to submeter this, but will have to feel that out with tenants.
Built: 1940
Condition: No major issues noticed on the walkthru. Waiting on inspection (will happen Wednesday). It's dated inside, but not bad.
Taxes: $729/yr
If there's any other info needed please ask! When I run the numbers on this it looks pretty good, but I'm definitely a novice here.
Most Popular Reply
This is a great cash flow opportunity and definitely a good way to get foot in the door. Two concerns...C class means headaches. Not always but always remember the 80/20 rule. Make sure you understand who your target audience is there and if you are ready to deal with challenges.
Second concern, you are looking to sell in 5 years or so. What are the comps looking like currently? Take 30-40% off of the in five years for a market correction once the market turns. Who will you sell to in 5 years? Will this be a desirable area in 5 years?
Other than that I say go for it, you will learn a ton just by going through the experience.
Cheers,
Damir