Yes, Peter is right on the money with the foreclosures, that they are priced in line with non-distressed. In addition to still finding the best deals on the MLS; even though the numbers are not as good as even last year.
When buying, you have to stay within the Westminster area (West of Gunnery Rd) because the rent values are higher. Anything East of Gunnery rents for about $100 to $200 less.
As far as negative vs positive. I haven't had anything stolen thus far, but there is quite a bit of repair cost that I incur with the A/C and the septic systems. In reference to the septic tank, it is EXTREMELY important to keep in mind that it has a life cycle of about 10 years, aspacially if there is only one servicing both units. Wares and tears faster, than as if there were separate ones for each unit. After that the tank has to be re-placed at a cost of approx $6-$9K. Because of it, I try to stay away from anything older than 2007.
When screening tenants, it's a bit different from regular screening. I still make sure that income is x3 the rent, but other than that it's a lot about meeting the applicant and getting to know their situation.
I aim at 15%+ cash on cash return. And even though I don't buy with appriciation in mind, it is highly likely that these duplexes will go up in value since they are priced well below construction cost.
Below are 2014 numbers on 5 of my duplexes. First number is my maintenance and repair cost and the second number is the expense ratio. Very Important!! I manage my own properties, so you would have to add the Property Management % to the expense ratio. A lot of times I buy these duplexes with tenants in place, therefore in duplex #2,4,5 where the Repair cost is higher, that is because during turnover I had to do more intensive renovation to the unit (tiles etc)
Maintenance/Repair Expense Ratio
1) $2,600 35%
2) $5,100 50%
3) $1,000 20%
4) $3,500 40%
5) $5,000 50%
