All Forum Posts by: Dan P.

I have an opportunity to buy a deal, but I'm having trouble deciding the value mainly because I believe the value isn't in the current rent rates but where they could/should be. However it will take some money to get them there. Ok here's the details.

2 Duplex's on one lot, about 2.5 acres with small shed for each unit, 2 Bed 1 Bath just over 1000sqft. Duplex A rents for $700 each unit, Duplex B rents for $850 and $750 ($3000k/mo). However the area rent for these should be about $850, with a face lift and some modernizing of the units roughly $4-$6k per unit should easily get $900-$950 up to $1000.  Location is rural setting, but only 1-2miles from downtown, I believe demand would be high, current tenants have been in units for 5-8 years and the current owner has never raised rents.

Asking price was $369k, while looking at the property I suggested I would be in at around $280's. They said they had accepted a $340k offer that fell through and couldn't go that low, but they understood my reasons. 1) Roof on one unit is needed in about 2 years $9k, long gravel road needs re-graveling about $2k,  3) units need some upgrading 4) Monthly expenses for lawn and snow removal due to large road and lawn. I waited a few weeks then emailed a seller financed offer at $290k, $15k down, 6% interest, balloon option for 3 or 5 years to pay them off quick. Response was they weren't interested in seller financing, but lowered to $335k.

So here are the numbers, one column with current rent the other with low end potential rent (not including updating costs)

Any input is appreciated.

Been on the forum for a couple months, literally listened to every podcast from the last year or so and my way to and from work. I have been looking at properties and have a pretty good Buyers agent, seems to be very competent and used to looking for investor properties. 

Found a property, made offer and my first obstacle I encountered was when I checked online my credit score was 752, I thought good to go. Called several places for loan based on this info, selected one and they said 20% down at 5.8% Term 30yrs and received pre-approval letter. When I called back with final negotiated numbers and had it under contract, they said my score came back 725 (middle of the 3 scores) and they now want to add $2000 in closing fees to get me at 5.75 OR they may be able to do the loan with 30% down but they would have to look into it. Is that normal? Should I move on to another bank? Another thing to note, was this is a small loan 84k purchase and they said there was no money to be made because my credit score was lower than I said.