Daniel,
Nice last name. Relation? Probably not, but good enough for me to offer at least a bit of advice.
First off, I think what you are doing is the best way to get started in RE investing. Living in once side of a duplex and renting the other (plus spare bedrooms in your case!) is a great way to live and have your mortgage covered while gaining experience as a landlord. While your friends are out there paying rent, you'll be stashing that money away.
Speaking of stashed money, you want to make sure that as much of it as possible stays in your hands and that's what you need to be thinking when you evaluate this potential purchase. When I look at a potential investment I ask questions that mostly pertain to what I am going to have to spend in the future. All properties require maintenance, you'll never get away from that, but BIG expenses are (mostly) avoidable in the near future if you buy right. Bad tenants and upcoming maintenance projects are profit killers. Here is what I want to know straight away:
- Are there current tenants?
- What do they pay?
- How long have they been there?
- Can I see a copy of the lease?
- Do you have payment history information for them?
- Do you have the results of their background check available?
- How old is the roof?
- How many layers?
- 20yr or 30yr shingles?
- How old are the windows?
- Vinyl? Aluminium? Double pane? Single?
- How old is the furnace/AC unit?
- What type of furnace (gas boiler, electric, etc.)
- Are the utilities split?
- If not, how is payment normally made? Does the landlord cover utilities?
- Is this a legal duplex?
- What are the comps in the area?
- What are the rental comps in the area?
- How old is the home?
- Is there a lead disclosure?
You'll see I focused on BIG expensive items where lots of deferred maintenance is going to cost you a fortune. The rest of it you can probably pick out on your own. You'll notice if the paint is chipping and that's no big deal to fix. You'll see if the carpet needs replacing or the refrigerators are from 1956.
Another focus is items that have nothing to do with the physical condition of the house. A lead disclosure is important, and understanding if and how the utilities are split can have a big effect on your bottom line.
Many of those things above will be on the seller's disclosure list. Make sure your agent brings that. Furthermore, I'd recommend getting an agent if you don't have one, don't let the seller's agent represent both sides of the deal!
Good luck on your first deal, In my opinion you're on a damn good path.
