i made an offer on a duplex Syracuse ( iam in CA) it is in sound conditon appraised at 42k 3 years ago has two tenants ( 500 ea.) property tax approx 2300 and ins 425 tenants pay utilites. I offered 25K with owner financing with a balloon in 3 years. any thoughts…? the offer was excepted—though no contracts yet—all has been through email and phone. If i do go forward–will i need to get an agent–or lawyer—to finalize. obviously i am new to all this. thanks in advance.
Are you familiar with the area where the duplex is? Buying without knowing an area or seeing the property can be risky.
On the surface it looks like a great deal by the numbers. You have $1k/mo revenue on a $25k property. That’s a ratio of 4%. I’d say at this point you need to finish your due dilligence. Offers are usually subject to inspections, etc.
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You need to make up a detailed view of what your revenue and expenses will really be. This will tell you how good of deal it really is.
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You need to decide how you will manage it. You probably need a property management company. Don’t forget to include this in your costs.
well my partner did look at it–at the time one unit was empry—the owener has put about 7K into interiors—there is maybe 1500 in exterior repairs that could be done. PM is about avrg. 10 %. the owner is just looking to liqufiy ----she is older and —is not cmfortable having property so far away (resides CA) it seems like a great deal to me —but since i also live in CA—i do not want to have same regrets. i need to get some connections in NY. no/
It’s 25K because it’s in upstate New York. You can buy duplexes like yours or better all day up there for that price 20-35K, heck some are even on the MLS!
Now do you know what the economy is like up there? I bet you don’t. Home are cheap for a reason, the economy sucks. No jobs/low paying McJobs. Walmart is the biggest employer in that region. The economic powerhouse has left in the 80’s and early 90’s. So did I. I sold my home in a nice suburb of Rochester for 73K in '94 and bought a home in Central New Jersey 150K. The new owners of that home sold it for 75K last year. I sold my home in New Jersey for 400K two years ago. So don’t expect any sort of appreciation up there. Also the only thing to do up there is drink and do drugs so don’t expect any stellar tenants. If they have to rent, you know they are losers, expecially when a home costs 40K if that.
I would never be a distant landlord in a poor/economic detressed area such as that.
thanks—something to think about----we are looking for properties that cash flow. This would work. appreciate the input.