Please help analyse deal on first property. Contract for deed.
Here's a deal that i am looking at doing, Please go over the numbers , feel free to point out anything that i might be overlooking.
Property is a duplex located in a lower income neighborhood. Its not a war zone though. Tenants already in place, both have been there for over two years and keep the place in good condition.
Seller is offering a contract to deed option @6%
Asking price is 135,000.
Down payment is 15000
Rents- 1600
Mortgage 6% assuming 30 yrs- 720
vacancy 8%- 122
Maintenance 10%- 153
Taxes- 200
Insurance- 92
water, trash, sewer- 104
Management- 70
Net income= 139/month
I do realize that these numbers are low. I am looking at making an offer for 125,000. This will bring the cash flow closer to 199/month
I will be doing my own property management.There is also the possibility to put in a third unit which will increase the rent by 500/month.
Would you do this deal?
Thanks in advance