Potential offer for first duplex purchase

[Shannon Persha]

New investor in the Milwaukee area market.  We are very interested in a duplex in the Milwaukee area.  

List price = $149,000; seller claims she has a cash offer of $130,000 and said she'd accept $140,000 from us (conventional loan w/25% down).  

My numbers ran:

Potential rent (neither rented currently, but rent-ready): Figuring low end total rent $1400 to high-end $2000 (staying conservative).  Seller claims $1200 a door rent capable ($2,400 total), however my research shows the area to yield $700 - $1100 (very high end).  MEETS the 1% rule, and if rent truly ends up $2,400 we'd be at almost 2%

GRM (Gross-rent multiplier): Best case rent GRM = 70.8, Mid-Case rent GRM = 83.3, Worst-case rent GRM = 101.1

Positives:

Buyer did a full renovation over the last 6 months, truly a turn-key property.

Negatives/reservations:

Property does NOT have a garage.  Unit 1 would be drive parking, and unit 2 would be street parking.  

Local advisor said while the building and renovations have been beautifully done, the area itself is one you wouldn't want to walk around at night, so he does feel her rental estimates are inflated.  She had only ever rented the top unit, and in 3-6 month short-term FULLY FURNISHED rentals, which might be why she yielded $1200 a month in rent.  

Questions:

Your thoughts?  I'm struggling to determine the operating costs besides what I've pieced together with my limited experience of owning single family homes, and our one townhouse investment property.  We are planning to use a Property manager for this one, which increases of Opex for sure.  Roof is only 6 years old, and all renovations done in last 6 years since this new owner has been there.  

The BP calculator does show about $200-$350 cash flow per month depending on the rental income (from ranges above).  

[Kody Crouch]

Milwaukee neighborhoods don't seem to have clean lines demarcating what is a "good" neighborhood and what is not, and sometimes a single block makes a big difference. Ask your realtor or local advisor whether this property is right between a neighborhood that's safe and one that's questionable. If it is, then you need to group your comps accordingly. For example, if comps to the southwest are 180 and to the northeast are 90... well in that case 140 might be a very good price or terrible price and you need somebody who can help you know whether your property should be compared to those south and west or those north and east.