August 2021 Newsletter

2680 S 8th st, lebanon

Duplex | $350,000 | August 12, 2021

Duplex on a large corner lot in the fast growing city of Lebanon Oregon

Unit Mix: 2 duplex units 2 bed 1 bath each

Total Sq Ft: 1584 total, each unit is just under 800 sq ft

Lot Size: 0.21 Acre

Year Built: 1978

Recent Updates: New carpets

Property Taxes: $3167 (2020)

Link to virtual tour: https://www.cribflyer.com/2680-s-8th-st/mls

What I like about this property

  • Quiet residential neighborhood with a mixture of duplexes and single family homes

  • Corner lot where the entrance for each unit is on a different street which adds additional privacy for the tenants

  • One unit appears to be vacant so this would be a perfect opportunity for a buyer to use an owner occupied loan and live in one unit while having most of their mortgage paid for with the rental income from the other unit

  • Well-priced duplex in a tight market - Lebanon housing market has been extremely hot and duplexes are hard to find

Concerns about this property

  • Property looks well maintained but it is still an older construction so will likely need some work and updates to get the highest rents possible

About the City of Lebanon

  • Lebanon is an Up-and-Coming city full of potential. Rentals are extremely tight (homes are rented within 48 hours currently) but home prices are still reasonable compared to the rest of the Willamette Valley which makes this an ideal place to invest.

  • Home to Western University of Health Sciences (opened in 2011), the first new medical school in Oregon since Oregon Health and Science University in Portland. Medical school has plans to expand its current campus in Lebanon.

  • Major employers: Lowe's, Samaritan Lebanon Community Hospital, Wal-Mart, Weyerhaeuser

Financial Analysis

Conservative Assumptions Made:

  • Total monthly rent $2800: Each duplex unit rent at $1400 (market rate, current rent may be much lower)

  • Landlord Paid Utilities $200 a month for water and sewer ($100 per unit)

  • Conventional loan with 25% down payment @ 3.25% interest rate (FHA loan with 3.5% down payment or Conventional 15% with owner occupied loan may be possible as well)

  • Property Management 8%; Vacancy, CapEx, Maintenance: 5% each

  • Included a $10k upfront rehab cost for some cosmetic updates

2680 S 8th St, Lebanon Duplex

Suggested Information to Verify (Buyer to do due diligence)

  • Always do your own research and analysis on properties!

  • Gather information about current rents and lease terms. Current tenants are likely paying below market rent.

  • Research on the Oregon Landlord Tenant laws including Covid specific restrictions or consult a real estate attorney

  • Verify who pays what utilities. It is likely that the owner pays for water/sewer bill because most multifamily homes bigger than a duplex do not have separate water meters. Owner may also be responsible for landscaping and trash pickup.

  • If the buyer is purchasing this as an owner occupied property, find out if the owner is willing to give notice to one of the tenants to vacate. This is usually a 90 day notice under current Oregon Law. Note that if you are using an owner occupied loan, the unit does not need to be vacant at the time of closing, you just need to move into the unit within 60 days of closing under FHA requirements.

Sources