Been listening to the podcasts for a couple years now...starting to become more knowledgeable and confident...I think?! Anyways, I hear Brandon turner say in the podcasts “just buy the first deal!” I know this deal is not killer, but what are your thoughts for a first deal. I have made zero offers on other deals, but have been “looking.”
I rent my current living space for $450/month. I’m single, make $3k a month...yes working on improving that. I am a licensed real estate agent as of December last year (6 months ago). Currently have a W-2 job though.
So here is a deal I’d like advice on.
I live in Whatcom County in Washington state. I met an older guy the other day that owns and lives in a duplex, but then also owns the duplex right next door. He is getting older and is planning to sell the duplex he does not live in in the next “1-2 years” after he “fixes it up just a little more so I can get maximum value.” He threw out there that he thinks it’s worth $260k-300. (He’s probably close on that.) The home is in a good area between Bellingham and Lynden. It is located on a fairly busy/noisy 2-lane rd. The duplex is in alright shape...not much room to add value after repairs in my opinion. I have seen it. 800-900 sq ft per side, 2bed/2bath, each unit has a garage. It is currently rented below market rate at about $780 per side.
I would not want the current tenants to continue to live there. As I was talking with the owner he went on for a while about how they were not good tenants and always doing things to violate the rental agreement. Plus, I need to raise the rents by several hundred dollars, so not likely they would stay long term anyways.
Let’s just assume I bought it for $280k, put $5k into it, then rented each side for $1000 (which falls short of the 1% rule. I could potentially house hack it and live in one end of course.) It would cash flow about $400-500 per month.
Should I dig deeper in to this and see if it can work or just move on to a better deal?
Thanks!
