All Forum Posts by: Taylor Horsager

@Keith Schulz The FHA loan would be owner occupied; I would plan to move in. Thanks for the tips on vacancy!

@Thomas Paine I think it really depends on the market... Here in Madison it is probably a lot like Montreal to be honest. Very high demand from an investors perspective, and from the renters as well. 

@Tim Herman the reason I didn't include vacancy is because it's (almost) literally 0% in the area. I have a friend that said he competed against 7 other renters to get his apartment lease! Regarding the repairs, I also intentionally kept that figure on the lower side because of the rehab that would take place right away. Is that not a good thought process? 

@Tim Herman -- Setting my cap rate miscalculation aside, do you think this is an attractive deal? The main reason I started this discussion is to validate that I've found a deal worth paying attention to! I know more opportunities will come, but I'd like to know what a good one looks like...

Also, I want to emphasize the fact that the attic would be renovated, and turn one of the units into a 3br/2ba. That unit would then probably rent at around $2000. 

Below are the numbers plugged into the BP rental property calculator, where I added $50k to the purchase price to account for renovation costs, since they would be included in the loan.

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Hey everyone!

I am a new investor saving for a down payment, and am analyzing deals for practice. I came across what I believe to be a very intriguing deal, and wanted to put it out there for input from the community. 

It is a duplex apartment with two 2br/1ba units, totaling roughly 2500 sq/ft. It is listed for sale at $399,000. Average prices for similar buildings on the same street go for anywhere between $400-500k. 

My strategy would be to do an FHA loan at 3.5% down, along with an FHA 203k renovation loan in order to improve the property. Some of the things that need work include: renovating the wood flooring, removing the wall paper and repainting the walls and trim, renovating the kitchen and bathroom floors, updating the cabinets and appliances, etc... All relatively accessible improvements.

Additionally, there is an unfinished attic space with plumbing already installed. It would make a fantastic additional bedroom to the upper unit, and would increase the overall bed/bath and square footage of the building. 

Lastly, the city plan has indicated that this neighborhood is an area where the city plans to invest money on improving!

What do you think, is this a good deal? 

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My initial estimates put the cap rate at around 9%... and similar 2br/1ba apartments in the area rent for around $1500-1750. 

The property can be seen on Zillow by following the link below: 

https://www.zillow.com/homes/for_sale/fsba,fsbo,fore,new_lt/apartment_duplex_type/2083975172_zpid/0-500000_price/0-1911_mp/globalrelevanceex_sort/43.083462,-89.35695,43.082484,-89.358667_rect/18_zm/