What do yall think of this fixer upper?

[Billy Jemial Miller]

Its a 2 unit (2bd 1Bh and 1bd 1bh) current owner is only charging $975 each unit. It has over 4,000 sqft and potential for off-street parking in the back. With a little fixing up plus adding some rooms and making the back available for parking I can increase the rents to and above $1000 each. Avg rents in that area for a 1 bd is $1000 and for a 2bd is $1200.

https://www.biggerpockets.com/...

[Richie Thomas]

Disclaimer: I'm still an aspiring investor, so take what I say with a grain of salt.

Hi @Billy Jemial Miller, a couple of thoughts:

I don't see a budget for a property manager.  Even if you plan to manage the property yourself, it's still a good idea to budget for a PM.  The money will go back into your pocket anyway if you end up liking the management side of things.  But if you don't, you've got a built-in budget to extract yourself, so you can hire someone else to do so while you focus on scaling your business.  10% is the industry standard.  I doubt it would go lower than that for a quality PR, but depending on what kind of neighborhood this property is in, it could go higher.

I notice you budgeted $125 for gas.  Not sure what kind of climate the property is in, but paying for part or all of your tenants' utilities can get expensive, since they have no reason not to (for example) run the heat full-blast with the windows open in January.  Same goes for water and sewer.  Find out whether the property's utilities are already on separate meters.  If not, research how much it costs to have that set up in your area.  Here's an interesting BP forum thread with more info on splitting utility meters.  Splitting utilities and handing that expense off to the tenants is a great way to increase a property's cash-flowing potential, and therefore its overall value.

How old is the property?  What repairs do you have in mind to move it from a value of $158,500 to $210,000?

Importantly, where do you anticipate finding a non-owner-occupant loan for 95% of the purchase price? Also, I'm not sure if you're familiar with the concept of private mortgage insurance (aka "PMI"), but most lenders will want you to pay for that as a monthly expense if you put down less than a 20% down-payment.

Those are the things that jump out at me first.  With more info on the property (ideally an address, but if not then at least a zip code), it's possible to dive deeper into things like comps, market analysis, seasonal expenses (snow removal, utility expense fluctuations), etc.

Hope this helps.