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Updated almost 4 years ago,
Analyzing an Off Market Deal
Hi everybody, I've been a long time lurker and came across an interesting deal that I'd like to get some opinions on.
About Me
As background, I'm a central NJ based investor. I closed my first property (duplex in a class B neighborhood) in December, and am hopefully finishing the renovation soon. Once finished, it will be on track to cash flow around $660/mo for a CoC ROI of around 15% (after PITI, utilities, CapEx estimates, maintenance, and vacancy).
The Property
Today I came across an interesting SFH property for sale by owner around 2 hours away in PA. The property:
- Is being offered for $80k
- ~2500 square/ft
- Is a double lot
- 3 bedroom, 1 bathroom, living room, kitchen, office.
- Uses steam heat, with a new furnace being installed now. Water heater is 2 years old.
Here's where it gets interesting - there is an attached apartment with a full kitchen, living room and bathroom that was previously lived in by the current owner's father. The only "issue" with the property is that this the main building and apartment both have screw-in fuse boxes that needs to be updated to a proper circuit breaker. The apartment has its own separate box.
Estimated Financials
Looking at comps in the area I'd estimate that if the two units were rented, I'd be pulling in around $1,600/mo without issue. With that in mind, we're looking at some nice numbers - with all the usual costs (and an additional 10% for estimated management cost), it should come to ~$8,200/yr net operating income. My plan is to try and work out some type of seller financing.
Area
The property is located in one of the larger towns in Luzerne County, PA. The area's population is pretty stable, being generally unchanged for the past 20 years. Mostly blue collar jobs, and a median household income of around $40k. I don't expect this to be an appreciation play.
This is potentially my first off-market and out of state deal, so can you think of any gotchas that I should keep an eye out for? I will be visiting the property this weekend.