All Forum Posts by: Steven Griff

Hello, everyone! I'm looking to leap from the nest (my parent's house), and I've been on the hunt for a duplex for my first home purchase. Unfortunately in my area, duplexes seem to be a dime a dozen (did I use that expression right?). Especially during these times, new properties are very infrequent and I've become fixated on this one particular property, a 1 bed 1 bath/unit duplex. 

I know this isn't ideal as I've been told most people don't really want to live in a 1 bed 1 bath (I'm 22 and single so I don't mind!). However, I feel like this may be a solid "starter home". Something that's easy to manage, and almost comparable to renting out a room in a single family but with more privacy. Not to mention, it's sub $100,000, which means I can absolutely afford the monthly expenses, even without a tenant. I made a few offers on the property, and eventually wiggled up to offering full price, however, my last offer I asked the seller to cover 5% closing costs (CC would be roughly $5,500 on this property). I was stiff-armed, and the seller refuses to come down from his asking price and his 2% CCA/1% Repair cap. 

Since my first offer, the seller has rented out both units with a one-year and 6-month lease and is supposedly cash flowing. Inheriting tenants during the COVID times seems scary due to courts being closed, but I have more than enough funds to cover monthly expenses worst case scenario + it would be great to purchase a property that's cash flowing before I move in. All that being said, am I crazy to think it might be worth offering what the seller wants and taking a gamble on the tenants? I intend to buy + hold the property, using this as a stepping stone. In your opinion, is a 1BD/1BA duplex a generally poor investment? I don't want to let this deal slip away, but I'm not being pushed out and can afford to wait for a better deal to come along if needbe.

I know it's hard to give super solid advice because you all are not familiar with the area. However, any insight is greatly appreciated.

Extra Info:

I plan on putting 20% down.

The neighborhood is fair, not great, but not bad. (I'd feel comfortable living there + some newly constructed homes nearby)

The property appears to just need minor cosmetic repairs. 

PRICE: $95,000

Current Leases: 6-month $600/month, 1-year $730/month + Owner paid Electric

Hey @Edgar Verdin, I've used the calculator and it shows that I'll be losing around $50-$100 each month while I'm living in one unit. Although not ideal, I think this is much better than forking out $500+ a month to rent somewhere vs. paying down my own home. Once fully rented, it's estimated to cashflow around $200-$300 a month with a 13% Cash-on-Cash ROI. These numbers seem fair, but I'd love to learn if this is worth the investment or if I should keep hunting for a better deal. One concern is that the property is in a not-so-great, industrial area (some newly constructed homes on the street, but some foreclosures, including the neighboring property as well), I'd also be interested in hearing other's stories of their first investment/experience w/ duplexes.

Hello, BP family. My name is Steven and I've recently begun looking for my first investment property. My strategy is to "house hack" by purchasing a duplex and renting out one unit and live in the other. I've had the privilege of saving up money at my parent's house, where I currently reside, and have amassed about $40K that I can work with. For this reason, I feel putting 20% down on a property to avoid PMI might be a good idea, but I'm not ruling out an FHA loan. I've been pre-approved for roughly a $160K loan, and have been looking at duplexes in this price range and below. Where I live, duplexes are scarce and I've been told it's strictly a "Seller's Market", making it difficult to negotiate pricing as you'll see with a recent offer I made.

I recently viewed a 1BD, 1B/1BD, 1B duplex that's not in the best part of town, but the price was enticing because I could survive if I can't find a tenant or the unit becomes vacant. That being said, it does need some work. However, most of the work appears to be cosmetic. One unit has been (and is currently) occupied for less than a month and the lease is month-to-month for $600. I've provided two images of the exterior of the property and you can see a quick walkthrough of one unit (vacant) here: https://youtu.be/t4Jcu9lCLy0 I should mention that I saw the other unit (occupied), and it looked to be in comparable condition.

I guess you could say I "low-balled" the seller and offered $80K with 3% CC with the understanding that no repairs are to be made by the seller. The seller countered and stood firm on his $95K list price, claiming that he will be breaking even at this figure and that the property will appraise for higher. I'd like to know I'm getting a "deal", but the list price is beyond feasible for me and it wouldn't break the bank if I need to invest an additional $10K-$15K in repairs. My question is essentially this, how bad of a deal would it be if I invested the asking price into this property? Amidst the coronavirus scare, I've also been told to hold off on investing in RE right now. However, if I'm buying and holding, I think that this is not as big a factor. I appreciate ANY and ALL insight/advice, and I apologize for the super lengthy post! Thanks in advance, ya'll!