1st Deal Analysis Rough Draft. Advice?

[David Hald]

Hello all,

I am a first time investor analyzing (and will soon have my agent and a trusted family member walk through/video property) a midwest duplex in a midsize town for a prospective buy and hold investment. Neighborhood and up/down duplex are both C class. I have done my preliminary analysis (I think), and I hope you all can give your insight, point out my shortcomings or omissions in calculations, and generally remark on how the numbers of the deal appear. 

Please note, I will not be offering full asking price for this property, because ARV won't reach current asking price + rehab cost. Part of my inquiry is, given my closing costs are low (no loan origination fee), in what range should my maximum allowable offer land?

Here is the info:

Tenanted duplex with 2 2br/1ba units, both tenanted and renting for $600 each.

Financing is via private loan at 4% interest only payments and final balloon payment at end of term (5 or 10 years, tbd)

Asking price : 57,900 ***note: following numbers are assuming the seller's asking price, which I would NOT offer***

Est'd ARV: 60,000

Est'd rehab cost: 15,240

Closing/Legal cost : 1,500

Down Payment : 17,000

Total cost of project : 70,400

Total borrowed amount : 53,400

Total Gross income : 15,880

Total Expenses  : 9,054

Net Operating Income : 5,478

Annual Debt Service : 2,136

Cash Flow : 3,342

Even with the over-market asking price, this property is already cash flowing. However, given the high asking price, I would lose an equity building short-term exit strategy. In fact, if I sold too soon, I would undoubtedly lose money. I don't want to have to depend on appreciation, which may or may not happen. 

How much would you offer? Why?

Thanks again, everyone, for your input. I look forward to your responses!