Advice on Purchase Options for 1st rental
I have come across an opportunity to purchase a rental home from a friend. Currently has a long time tenant (8 years in the home and re-signed another year lease in December) paying $1600 per month. The house is valued at $220,000 and the current owner owes 130K. They need to get the cash out for some projects at their primary residence. She is wanting to sell it to me for 200K. I am interested, but do not want to put any money down for the loan. Any thoughts or suggestions would be greatly appreciated. Below is a breakdown of the costs with the property:
Monthly Expenses
Insurance = $50
Taxes = $200
Principal at full 200K loan @ 5% = $1074
Total of $1324 with a cash flow of $276 per month
If I get a 180,000K loan then the cash flow would go to $384 per month.
I am eager to get into Real Estate, but want to get in with as little cash upfront as possible. I do have about 12K liquid and have access to 25K line of credit at 8.99% that is also available.
Thanks for any help or advice you can give.