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I want to buy a duplex. How do I do that?

 

Very good question. I thought you might be asking that. I am going to give the step by step instructions that I developed over 25 years of investing and purchasing 250 rental units. This is the exact same process that I have taught hundreds of fellow investors over the last several years.

Instructions for a Duplex

1. First we will have a telephone conversation to go over goals. At this point you need to have available cash or credit to continue.

2. Send in email to me your your name, email address, and phone number.

3. One of my Investor Agents will set up your search criteria on the MLS system.

4. Initially you will get an email with a link to the MLS system. The first property matching the search criteria will be shown with a drop down box at bottom left allowing you to scan forward to other listings. You will be receiving the "FULL" listings. This first email may consist of several hundred listings.

5. Next, you will separate the good from the bad. Your objective is to narrow the list down to about 30 properties. You do this by comparing the list price to the market values for the area. The list price should be below the market value. Also, look at the photograph(s) of the property, the lot size, room sizes, and other characteristics of the property. This will take a few passes of the listings. As you narrow the list down also use the county web site for further research. This is a process that you will get better at with experience.

- For multi units my experience shows me that I should get 400 – 500 for 1 bedroom apartments, 450-650 for 2 bedroom apartments, 600-750 for 3 bedroom apartments. Taxes can be obtained from the listings. Insurance should be .5% of value annually ( $100,000 property is $500 per year ). I try to keep price per unit to $35,000 or less per 3 bedroom unit, $30,000 or less per 2 bedroom units, $25,000 or less per 1 bedroom unit.

- There are variables here like the condition of the property ( turn-key verses needing rehab ).

- These market values and rents are for those properties in what I call the sweet spot. You may or may not want ever want to live in these properties but that doesn’t matter because you’re going to. Your tenants are and they like it just fine. This is the low end of the moderate range of properties where the ratio of rent to sales price is the greatest. Hence you get more bang for your buck.

- Trust your instincts to focus on what you think are better deals and eliminate the rest.

- You will get better with experience and we will be guiding you.

 

6. The resulting list of 30 or so properties is your drive by list. Now you will drive by the properties to further narrow your search down to 10 to 15 properties.

7. At this point you will email to me the MLS #'s ( in a string separated by commas ) of these 10 to 15 properties. At this point I will review your homework ad narrow the list down further. I will make notes to show you my work. This will typically result in 5-7 final properties.

8. Now we will schedule an appointment to go see the properties.

9. After viewing the properties you should have a list of 4 to 7 properties that you will fill out the MAO, CHAHFLOW and cost sheets for.

10. I will review this work and with my help you will decide which properties to make offers on.

11. We will fill out the sales agreement, make a photocopy of your hand money check, and provide both with your proof of funds to me. I will provide comps to verify you ARV(s).

12. Now we make the offer(s) !

 

 

This should help to shed some light on how I accumulated so many properties over the years. I sincerely hope it will help you see a real world alternative for investing your hard earned dollars.