I’ve always thought that a good way to go with a duplex might be to sell it to two couples or two friends (who you know) who are currently renting for close to what they could buy from you for. By my calculations that increases your cashflow to over $360/month (see payment below.)
Not bad! Especially when you consider that you don’t have any further obligation but to collect those payments.
This would remove you from the landlord business, but keep you in the game. You’d have no monthly costs (other than the gas to drive to your bank to deposit your cheque every month :)) you have much higher cash flow, and you will have helped two of your friends to buy their first home.
So lets look at the numbers: If those apts are renting for $500 and $600 respectively, and your friends are paying roughly that in rent. You could easily sell to them on a note for $1,000+/- and they would then be responsible for fixup and maintanence and so forth (they own it after all.)
If one of the friends wanted to move, the other could buy them out and rent the other unit, or sell to someone else (you perhaps?)
Consider this post an example property, however it does exist in the real world. I’m wondering if I’m leaving anything out or if there is a better way to look at the deal. I am not really considering buying it, just trying to see if I’m analyzing these things properly
Property is 2 unit legal non-conforming rental now in foreclosure. #1)2bd/1ba main floor #2) 2+1bd/1ba upper. It is in poor condition(driveby) in a rental neighbourhood and looks a little ‘tennant worn’.
So here we go
Ask : 67900.00
ARV : 82500.00 AVG price in area for decent 2 unit rental
PP : 60000.00
DWn: 15000.00
clsing csts : 2100.00
Mortgage 1st: 45000.00
loan 2nd : 17100.00 (investor 10%,int only, 3 yr balloon)
Thanks in advance for any comments. I’m trying to get a handle on how to evaluate these deals so I’m more interested in wether my method is valid… anything left out etc.
Just read over my post and the thought struck me that now that I’ve got the whopping 25$/month rolling in - what do I do now. Fix it? Sell it? Wait? Retire?
