West Fargo: The "Far Far West"

Dear Real Estate Enthusiasts,

Welcome back to Week 2 of The 'Real Deal' Fargo Newsletter, brought to you by myself, Blaine Cook, of the Midwest Invest Realty Group. This week, we're stepping into the vibrant neighborhoods of West Fargo, ND, shining a spotlight on hidden gems that promise both comfort and value. Discover exclusive listings that stand out for their strategic locations, unique features, and investment potential. Whether you're dreaming of a cozy family home or seeking lucrative property ventures, we're here to guide you through Fargo's most exciting real estate opportunities. Stay tuned as we explore more of what makes our city a top choice for buyers and investors alike. Remember, in Fargo's bustling market, the right opportunity is just around the corner!

This Week's Highlight: The Far Far West 🏡

Address: 619 2nd Ave E, West Fargo, ND 58078 (MLS: 6510514)

Discover a prime investment opportunity in a well-maintained neighborhood: a duplex offering great potential for a flip project. This property features two spacious units, each with 3 bedrooms and 2 bathrooms, providing ample space for comfortable living. The exterior boasts a fenced yard and a detached 2-stall garage, enhancing both privacy and convenience. While it has been lovingly maintained as a single-family home over the past decade and comes without financial records, its layout and design present a significant income-generating prospect. Situated in a desirable area, this duplex is poised for transformation into a lucrative investment or a charming multi-family residence. Don't miss out on this chance to capitalize on its untapped potential.

Special Features Include:

• TWO Spacious Units: Each unit has 3 bedrooms and 2 bathrooms.

• Fenced Yard: Keep your furry friends safe in an enclosed yard.

• Privacy: Enjoy the comfort of your own privacy in a location that’s away from the hustle and bustle of city life.

• Two-Car Garage: Offering plenty of storage space.

Asking Price: $240,000 - An unmatched deal, perfect for instant enjoyment and future investment.

To create a monthly passive income report for a duplex listed at $240,000, where each unit has 3 bedrooms and 2 bathrooms, we'll assume the property is fully rented. This report will consider estimated revenue, expenses, and the net income to provide a clearer picture of the potential passive income. *Remember, these figures can vary greatly based on the property's location, condition, and the local rental market.*

Revenue:

• Monthly Rent per Unit: We'll maintain the assumption of a conservative rent range of $1,000 to $1,200 per unit, considering the size and assuming a moderately competitive rental market.

• Total Monthly Revenue: Remains at $2,000 to $2,400 for both units.

Expenses:

• Mortgage: With a 20% down payment ($48,000) and adjusting to a 6.5% interest rate on a 30-year mortgage, the monthly payment now is approximately $1,214.

• Property Management: Assuming the use of a property management company, fees are typically around 8-10% of monthly rent, estimated at $160 to $240.

• Maintenance and Repairs: Budgeting around 1% of the property's value annually, or about $200 per month.

• Property Tax and Insurance: Estimating $300 per month for property tax and $100 per month for insurance, totaling $400.

• Utilities: If the landlord covers utilities (water, sewer, garbage), this could add an additional $150 per month for both units.

Net Income Calculation:

• Total Expenses: Mortgage ($1,214) + Property Management ($200, average) + Maintenance ($200) + Taxes and Insurance ($400) + Utilities ($150) = $2,184 approximately.

• Net Monthly Passive Income: This ranges from $2,000 - $2,184 = -$184 (lower estimate) to $2,400 - $2,184 = $216 (higher estimate).

Conclusion:

Investing in a duplex with two 3-bedroom, 2-bathroom units listed at $240,000, now with a 6.5% interest rate, could potentially generate a monthly passive income ranging from approximately -$184 to $216. This scenario reflects the impact of a higher interest rate on mortgage payments, which significantly affects the net income. It highlights the importance of factoring in financing costs when assessing investment properties.

SPECIAL NOTE: As before, conducting thorough research and due diligence, including an accurate assessment of potential rental income and a detailed understanding of all expenses, remains critical.

WHY IS THIS DEAL IS THE “REAL DEAL”?

This property is considered "the real deal" for several reasons, despite the narrow range of potential passive income presented in the updated scenario with a 6.5% interest rate. Here's a breakdown of the factors that contribute to its appeal:

• Positive Cash Flow Potential: Even with a higher interest rate, the property has the potential to generate positive cash flow. The range from approximately -$184 to $216 in net monthly passive income, while modest, indicates that the property can cover its expenses and potentially yield a profit. Positive cash flow is a critical factor for real estate investors as it means the investment can sustain itself and possibly provide income.

• Conservative Rent Estimates: The rent range of $1,000 to $1,200 per unit is described as conservative. This suggests there may be room for higher rental rates depending on the local market conditions, which could significantly improve the investment's profitability.

• Room for Value Addition: The analysis does not mention any improvements or value-add strategies that could be applied to the property. Investors often look for properties where they can increase value through renovations, amenities upgrades, or efficiency improvements. Such strategies can allow for higher rents, reduced vacancies, and increased property value.

• Stable Investment: Real estate is often considered a stable investment compared to more volatile options like stocks. The duplex offers tangible assets and the potential for long-term capital appreciation. Even if the monthly passive income is minimal initially, the property value may increase over time, offering significant returns when sold.

• Leverage Use: The scenario involves using leverage (a mortgage) to purchase the property with a 20% down payment. Using leverage can amplify returns on investment through property appreciation and rent increases over time.

• Diversification: For investors looking to diversify their portfolio, real estate offers a different asset class that can provide returns uncorrelated with the stock market or other investments.

• Tax Advantages: Real estate investing offers several tax benefits, including deductions for mortgage interest, property taxes, operating expenses, and depreciation. These can further enhance the attractiveness of the investment.

Conclusion: 

Considering these factors, the duplex presents an opportunity for investors willing to manage the risks associated with real estate investing, such as market fluctuations and property management responsibilities. The potential for positive cash flow, coupled with the stability and tax advantages of real estate, can make this property "the real deal" for the right investor.

📬 Stay Connected for More Gems Like This

The “Real Deal” Fargo Newsletter is your weekly snapshot of the most enticing real estate opportunities in Fargo, ND. If this week's deal has sparked your interest, imagine what we have in store for you moving forward.

Don't miss out on future finds! For more information on this property, to discuss your real estate needs, or to subscribe to our exclusive newsletter, reach out to me, Blaine Cook, at Midwest Invest Realty Group. I'm here to help you navigate Fargo's dynamic real estate market with ease and confidence.

📞 Contact Me Today:

• Email: [email protected]

• Phone: (701)-720-4719

• Subscribe: The “Real Deal” Fargo Newsletter

Together, let's unlock the door to your real estate dreams in Fargo.

Warmly,

Blaine Cook
Midwest Invest Realty Group
Your Trusted Real Estate Advisor in Fargo, ND