All Forum Posts by: Mitch Mitchell

Edit: The current owner does not live in the property. He lives in FL and collects the rents.

Hey everyone,

I have been interested in buying this duplex in my town but since I do not have a lot of cash, I have gone the FHA route. Well, this is not exactly an easy route to go and there have been some bumps in the road. I was thinking today about any other options and I thought about Rent to Own.

Question: Since it is a duplex and I am occupying one half of the property, who gets the rent from the other half? Would I get it or would the seller still get it?

I think I'm going to contact a realtor this week to try to get a deal done. Any last minute advice??

Thank you all for the input so far. 

Jeb, no offense taken at all. It's in a fine part of town. Pretty much no crime in this town.

Another thing I forgot to mention: All utilities are separate (gas, water, electric). However, I would pay trash. 

Hey everyone,

I am considering purchasing a duplex that is on the market in my home town. The plan is to live in the bottom and rent out the top. The upstairs unit is currently occupied. I am going to have to go FHA since I do not have the funds for 20% down. The reason I say that I am on the fence is that I feel like it is just an OK deal and not a great deal. However, I will be having to pay my student loans back here soon and the rent from the top unit would help my situation tremendously. Any and all feedback is welcome. Here are the numbers:

Asking price: $86,000

Purchase Price: $82,000 (Seller pays all closing costs)

Principle and Interest: $375/month

Taxes: $85/month

Home Insurance: $25/month

Private Mortgage Insurance: $65/month

= PITI: $550/month

Rental Income: +$450/month from the upstairs unit

$550-$450 = $100 monthly payment for myself. I am currently living in an apartment where my rent is $475.

Hypothetically, if I was not living in the downstairs unit, it would rent for $525 a month so both units could rent for $975 (450+525).

I would manage the property myself since I would be living in it. CapEx I guess is kind of unknown it is a little bit of an older house that needs probably $2-3k in minor repairs and paint. The seller actually agreed to fix a few things out of their pocket. Roof is new, siding is new, about half of the windows are new, new boiler, new hot water heater.

Just looking at the numbers, should this property warrant my interest? Would you be interested in a property showing these numbers? Try to put yourself in the shoes of a guy whose about to get hit with $350 a month in student loans! (a number he cannot afford). Cheers!

You're fine man. Thanks for the input. Anyone else have any opinions on this deal? 

I must be misunderstanding what CapEx is and how to calculate it. I confuse it with maintenance costs.

The property is in fair condition. Brand new roof and siding, brand new boilers and water heaters. Brand new carpet as well. It is move-in ready since both units are currently rented but there are some minor updates I would like to make (paint, ceiling fans, fixtures). 

CapEx: 8%

Even after I move out, I will continue to manage the property. 

Thanks for the reply David!

Hey everyone!

So I am about to pull the trigger on buying this property but the numbers that I am looking at put me on the fence of good deal / just an OK deal. The property is an up and down duplex. 2600 sq ft. 2 bed 1 bath in both units. The top unit is rented for $500 a month and we plan on living in the bottom unit. We are financing through FHA with 3.5%-5% down. Hypothetically, if both top and bottom units were being rented, we could get $1100 a month in rental income. We want to live in it for 5 years or so, refinance, move out, and rent both units out.

Here are the numbers:

Purchase price: 79,000

P&I: 350 per month

Taxes: 100 per month

Insurance: 30 per month

PMI: 50 per month

Management: 0 per month (I will manage)

Trash and Sewer: 50 per month

Separate gas and water lines

Vacancy: 8% (College town so it is easy to rent)

How would you rate this deal based off of these numbers? And looking at the property down the road when we refinance and rent out both units at $1100? Thank you all!