Met with our realtor yesterday to check out the inside of the foreclosure duplex I’ve been eyeing. Honestly, I was almost hoping that it was completely trashed out inside, as I have enough going on as it is, but it actually wasn’t in terrible shape at all.
It’s a weird layout, as it used to be a beer joint that was converted into a duplex, so there’s some odd stuff here and there. I’m not even sure it was actually rented as residential property all that long, as there’s no flooring other than bare concrete slab in most of it and it has the most gawdful paint in one side of it, pink, dark purple, forest green, and red carpet.
There’s also some pretty creative plumbing in one half, and that’s just what’s visible, as far as plumbing for the toilet actually running along the siding at one point, exposed and attached to the wall. I ain’t no expert but I’m going to go out on a limb and say that it’s probably not supposed to be done that way. Electrical looked okay and fairly new but again, based on the other creative engineering, there’s no guarantee that it’s all up to snuff.
It’d need new appliances on both sides, but the bathrooms were in decent shape. It’s got a newish metal roof, but most of the windows need to be replaced, along with about half the doors. No clue on the furnaces and water heaters but they’re definitely older and likely in their declining years.
Sounds pretty crappy on paper, and, well, it looks pretty crappy in person. But the redeeming factor is the size (1800 sq. ft. total, with a 3-1 on one half of the duplex and a 2-1 on the other) and potential price, as it’s listed at $49K. It’d rent pretty easily for $700-$800 with both sides occupied, and even just renting one side would cover the mortgage cost.
It’s also zoned as commercial property, and part of me wondered about turning the front section (the 2-1) back into commercial space, and renting it as a package deal to someone looking to live in the back and run a small business out of the front.
If I could get it at around $40K, I think I might pull the trigger. That’s a pretty steep discount from the asking price but it’s a REO property and needs lots of work, so I doubt anyone is going to jump on it soon, and they might accept a lowball offer just to get it off the books.
$40K is about what our realtor paid for his REO duplex that he just bought down the street (which was actually owned by the same guy who got foreclosed on on about 7 properties in town simultaneously), and his total monthly bill for mortgage+insurance (with a 100% financed 30 year fixed mortgage) is about $325.
So I’d be looking at $400-$500 NOI/month, which, umm, ain’t bad at all. Assuming the furnaces and water heaters are shot, I’d have to put at least $10K into it to get it presentable and rentable, but that’s doable, even with expenses looming for the 1002 S. Main St. house.
Hmm…
