All Forum Posts by: Doug Wright

Before offer check how old water heaters, furnace/ac, age of roof.  During walk thru look under all sinks for leaks/signs of leaks. 

If this is your first purchase I would recommend hiring a home inspector to give you a detailed report while under contract. Make sure you have an inspection period. Review leases, ask tenants if they like the area, how long they have been there, and if they plan on staying (if their units are clean and you think you would want to keep them). Look at tubs to see if there are cracks if fiberglass or rot/rust kn steel tubs. 

Good luck and happy investing!

 Agreed. 

 In the market I invest in some duplexes were sold off as single family attached homes. These properties have gone down in value while everything else goes up. The rents have remained stagnant for years. Full duplexes sell for about 80k (both sides) while people stuck with 1/2 duplexes are constantly trying to sell for 60k with no luck. I can drive down a street where there are about 60 duplexes (120 doors) and about 50 duplexes each side has a different color roof, different siding, and they dont even look as if they were built at the same time. I can see where maybe some markets it would be worthwhile. But for me, in my market, I run unless there is a way to buy the entire building. Also, I have been in property management for 15 years and have managed 1/2 duplexes for people in the area and have experienced first hand having an "absent" owner of the other half that refused to do any repairs to their unit so rent for the other half suffered and vacancy was extended as people didn't want to live next to "that" house.

Would never buy 1/2 a duplex. You will have no control over how the other owner maintains half the building. What happens if they put a "bad" tenant in and refuse to do anything about it. What happens when exterior needs paint, siding, roof, etc. Are they in a financial state to make repairs as needed. If the other 1/2 the building is not maintained it affects the quality and appeal of your 1/2.

My minimum is just the interest amount accrued.

Seems like a high payment on a HELOC. The credit union I use only makes me pay interest on the balance used (5% adjustable) during a 10 year draw period. I have employed the same strategy when rehabbing homes as getting access to the funds is easier.

I recommend talking to the lender you plan to use to refi and make sure they dont have a requirement on cash out refi amount. Some may look at when you bought it and only give you 75-80% of purchase price depending on how long you own it before refinancing. Others will use the ARV. Just want to know what you are up against before you start.

Good luck and happy investing!

I have closed many loans with local banks that have had 10% down payment on total loan (purchase price + rehab costs). For example 70000 property purchase, 10000 rehab budget, 8000 down payment, 72000 loan for 5.25%. Only downfall is 15 year amortization for buy and hold, or 1 year no payment on fix and flip loan. Sell within a year or refinance by paying off 1 year interest.  Closings costs on a loan average about $1500.  Have to love small town banks that are investor friendly.