All Forum Posts by: Kevin Nichols

We are currently rehabbing a duplex that has no washer/dryer hookups. There are closets near the plumbing that we can use and I got a quote of about $900 to run plumbing and electric.  

We already have the drywall down near the plumbing wall.

Is it really worth it to add this?  My partner thinks it's another possible problem to have them.

These duplex units will go for $525 to $550 per month.

Thoughts?

Kevin

@Sergiu Ionita

 You mention the seller can't or won't...which is it? 

If you don't want the tenants there, you should make that part of your offer to purchase. It shouldn't be your job to manage that process, especially if the seller can't produce lease agreements. 

Most buyers want to vet their own tenants....and it may be an opportunity for you to rehab some of the units and increase rent levels.

If you want to keep the tenants, ask the seller to get signed lease agreements before you purchase.

@Ted Jackson

Congratulations. Sounds like a good deal. I'm in Rock Hill and the inventory seems to be really tight!

In my state, SC, the tenant lease agreement survives the sale of the property. I've purchased 2 properties recently where tenants were in place and the security deposits were transferred to me off the closing statement.

If the security deposit language is on the tenant lease you received a copy of...and of course the binding contract between the tenant and previous owner is there, you could specify the repayment of the deposit is on the previous owners hands when the tenant leaves...according to the lease.

Ideally, you should check your local laws pertaining to deposits and transfer of tenant leases.

Your situation does make me rethink my usual offer to purchase document and I'll start including that in my other conditions.

@Dawn Anastasi

My partner and I just bought a $25K duplex and we did the demo yesterday. We found an easter egg too!  :)  A 12" x 12" black taped hole where a drywall hole was....on the back was about 100 dead roaches that unfortunately met their fate being stuck to the tape.

In addition to REI by night, I'm an ad agency owner by day. We shoot a lot of photography at the agency. Below are some quick tips to help:

1.) Lighting - Make sure you have ample natural lighting. Open the blinds, doors, etc. to get as much as you can. Turn on the lights as well.

2.) Your iPhone and Powershot won't have the wide angle lens needed to get a full room photo. Back yourself into the corner and shoot a few shots of the room and you can use online tools to seam them together. 

3.) If you do upgrade, look for a lens to fit your needs. I have a Canon 5D Mk II, with a 16-24 lens and that works great for wide angle shots.

We just bought our 2nd duplex in a "B" neighborhood. It's a complete gut job and we'll have to replace 15 windows. The previous owner let it go down so much and the tenants were evicted.

Even the newer windows have broken windows. 

If we invest in new windows....can anyone share strategies for reducing the chances of broken windows again?

My ideas included adding privacy fend sections with hanging plants (to add a little elegance) in front of the windows that are prone to being broken.

@Eric Blackford

 I am by far not and expert. I just started out last fall. But this is what I would do:

1.) Look at comps for the duplexes in your area. If there are none, then comps in similar size towns near you.  

2.) The owner is an out of state owner and is probably just trying to get out. The amount he'll take is based on his motivation. You should probably even supply a personal letter with your offer indicating you're trying to make a better place to live in your town, you're local so the tenants have a close by owner, etc.  

3.) Your financing is OK. If you push it to a 30 year term, you'll get more cash flow...slightly.

4.) What seems to hurt you on the expenses are your $1200 utilities and $840 insurance.  Our insurance on a $55K duplex in SC is 499 and we have no utilities.

If you could get it for $55K and get your rents up to $540/month, you're looking at a good 20% CoC.

You'll need to decide what your goals are. My personal goal is 15% CoC.

@Eric Blackford I own 2 duplexes.  Your numbers look accurate, but I would reduce my vacancy to 8-9%.

The cash on cash is a little low for a duplex. One of ours gets 32% with a 15year mortgage and the other gets 22% with no mortgage.

Keep in mind when you buy duplexes, you're looking for good cash flow because when you sell them, you'll be selling to other investors who are most likely savvy like you with their numbers.  Also, in my area, duplexes don't hardly appreciate at all. 

@Account Closed We anticipated it to be a complete gut job.  I was just hoping since the duplex is still under property management this month and charging the current owner that a walk through after the eviction would take place.