Re: Been there - did this - Posted by Doug, KY
Posted by Doug, KY on February 09, 2000 at 10:09:22:
You want to close after the first of the month. Try to have the owner place an exceptable tenant to you in the other unit before closing. Normally, you would like to place tenants that you have screened in after closing, especially if your intending on raising rents, but this will work when you need cash to close. Have the deposits for both units and the prorated rents delivered to you at closing. You see by closing after the first, this will give you just short of sixty days before the first mortgage payment. (Deposits + two months rent per unit = closing costs) Also, ask the lender (mortgage broker) if you can finance any of the closing costs. You’ll be surprized by what some will do even if it’s unattentionally wrong. One lender financed the escrow for taxes and insurance. Now, I had to correct it later but it did buy time. If it’s the money maker you believe, Figure the numbers and go for it.
I would say that being landlord is a business and being friends with your tenants is not important but getting good tenants and receiving the rents on time is. I must say buying a duplex for $35,000 with no rehab or maintenance seems a little strange; I would question why the other unit was empty, what the location is (desirable - undesirable), what the cash flow is and could be, etc. Some of the best lessons are learned by doing. In any case, get your game plan togather and decide what it is you want to do. Become more educated - find some books or course to take. Sometimes just increasing the cash flow and reselling is a better option instead of holding it. Just a thought.
This is just one answer. It’s still pretty much conventional because you are using a downpayment and instutional funding to get into the deal. Knowing all the circumstances, there probably are other ways to acquire this property for profit and/or cash flow. One thing you mentioned about the owner/investor not hurting for the monthly payment and not being motivated and one unit rented and other not-Hmmm. He, in fact, could be motivated and tired of dealing with it if he has had one or more units vacate or evictions. Just a thought again.