September 2021 Newsletter

1851-1853 and 1861-1863 NE Adams St McMinnville

Duplex | $375,000 |
 Sept 24, 2021

Set of 2 duplexes in the charming city of McMinnville that can be purchased separately or together

Unit Mix: 2 bed 1 bath each
Total Sq Ft: 1768 total per duplex
Lot Size: 0.23 Acre
Year Built: 1974
Recent Updates: New roof, gutters, downspouts, exterior paint, vinyl windows
Property Taxes: $2854 (2020)

What I like about this property

  • Recent updates including new roof

  • Fenced yards and carports

  • Close to schools and shopping

Concerns about this property

  • Noise - the properties are in a commercial area located across from businesses including a car wash

  • If purchasing one of the duplex individually, the buyer may need to establish a clear property line with the adjacent duplex (fence)

About the City of McMinville

  • Current population: 34,743 Est (Wikipedia)

  • Consistent population growth: McMinville more than doubled its population between 1980 and 2002 - much higher growth rate than the rest of the state

  • Home to the Evergreen Aviation & Space Museum and an annual UFO festival

  • Historic downtown with restaurants, wine bars and galleries

  • Major employers include: Willamette Valley Medical Center, Linfield University, Cascade Steel Rolling Mills, Meggitt Polymers & Composites, etc.

Financial Analysis

Conservative Assumptions Made:

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

  • Landlord Paid Utilities $200 a month for water and sewer ($100 per unit). Landlord can choose to bill the utility bill back to the tenants or charge tenants a flat utility fee

  • Conventional loan with 25% down payment @ 3.5% interest rate

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

1861-1863 NE Adams St, McMinnville OR

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