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Updated about 13 hours ago on . Most recent reply
First time multi family duplex buyer
Hi Biggerpockets community just wanted to check in and see what you guys thought of this deal
490k purchase price duplex in Morris county at 6.5% for 15 years. With my 40% down payment mortgage with property taxes and insurance comes out to $3600 a month.
Current rents are 50% of market value, I'm looking to renovate and bump up to 1800 a unit which is still at least $400 below market value for a 2 bed 1 bath in Morris county.
I strongly believe after replacing the roof, repainting the house, minor landscaping, minor kitchen and bathroom updates I could increase the value of the house to at least 580k. It has modern electrical and copper plumbing. Electrical work was done in the past 10 years, all romex.
I don't feel so confident about this deal since my last deal was 350k purchase price, 100k in renovation and 700k sale price but I need some place to park my money. What are your thoughts?
Most Popular Reply
Hi @Michael Carlson what's your goal purchasing? Replacing roof, repainting house, minor landlord scaping for a multi family is not going to see a major jump in ARV. I need more information to give a clear diagnosis/ advice. I really need to know what your personal plan is with the property, are you house hacking or buying strictly as investment. This makes a huge difference when it comes to removing tenants. If existing tenants are 50% under market value, you will need to make sure current tenants are out. You cannot just raise rents 50%
Not sure what your cash reserves are or if you are planning to 1031 or something along those lines but I would rather see you keep cash in your pocket and apply it to a rehab that involves addition or updating kitchen/bath so you can see sizable jump in ARV and rent increases.
- Shawn Mcenteer
- 9739753895
