Need Professional Opinion/ FHA 203K Property

[Twan Torr]

I’m in a huge dilemma and I really could use you professionally help.

I’m currently a resident in Milwaukee WI. And I’m in the process to buy a duplex (four bedroom 2/2)that needs some work.

The work that needs to be done is “15k” worth of foundation work, as well as “15k” in renovation of the unit I’ll be staying in.

(The other unit is occupied with tenant paying $750. Lease ends May 2023)

I got an accepted offer at $158k but with renovation and everything else it brings the house to $195k (Reno, sellers credit, loan fees, etc…)

My monthly payment is about $1760 without including water and gas. And I would have about 65k worth of equity after renovation.

I also just found out there is a third wall that needs to braced which would bring my foundation cost to “20k”

ARV is $1300 a unit at the most in the area.

Is this a deal or should I keep looking?

[Brie Schmidt]

@Twan Torr - have you had the feasibility study yet?  My guess is the reno will be much more.

$200k with $2600/mo puts it at a 7.5% cap rate by my guess and a good deal if it is a A or B area.