Duplex Decision in Kentucky near Fort Knox

[Troy Luster]

Each side has 3/2 with 1 car garage and unfinished basement.  Units are 1200 sq ft.  Rents are $700 each side.  Both units are occupied.  Renters pay all utilities.  Neighborhood is B-/C+.  There are only multifamily properties on this street.  It seems as if the rents are maxed out, and could not be increased much without owning all 20+ units on the street.  Asking price is $130K, but this is high considering age (built in 1991), location, repairs needed, and the other properties around it.  One unit will definitely need carpet and minor drywall.  The basements/garages are tiny (600 sq ft) and only a small car would fit.  This property barely meets the 1% rule, but this is common in this area.  Assuming a selling price of $120K and 20% down, monthly cashflow would be $222.76/month.  I have some experience with single family, but wanting to get into multi family.  In this area it seems sellers want a premium for occupied properties.  What are your thoughts?

[Christen G.]

Make an offer on it at a number that makes sense for you and is cash-flow positive. Some questions for you: is it currently rented and what are the lease conditions?
If you do the carpet + drywall (and paint) can you get $750-800 for that unit?
Can you add $50/mo for "covered parking/storage" to increase revenue. It's great they're paying their own utilities.