Good buy? 10% cap rate, 8.5% coc, $35 cash flow?

[Mike Williams]

Is this a good buy? Ok neighborhood, not bad but not good. 80k for house. Place is a duplex, 1 bed 1 bath on each side. 1500 sqft. Rent is currently 450 on each unit so 900 total. Thoughts?

[Michael Seeker]

@Mike Williams - Your CAP rate shouldn't be higher than your COC returns if you're leveraged in this lending environment. Generally speaking, COC = CAP when you buy with all cash. If Interest Rate > CAP then COC < CAP. If Interest Rate < CAP then COC > CAP.

By that logic, unless you're paying really high interest, your COC should be higher than 8.5 or your CAP should be less than 10...care to share how you're calculating these?