Since my first property I was seriously looking at fell through, I thought I would try this again.  Hopefully it is a winner this time.

@Bram Spiero 

 I just wanted to let you know that I am evaluating another deal again to give you a chance to jump in.

It is really too bad that I cannot attach files to the post.  I guess I need more training on how to actually use BP.  I have been so focused on everything else, that I haven't worked on that.

Here's the info, though:

$320,000 asking price, although my highest and best offer would be $302,000.  This property has 10 1br 1ba units.  It brings in $4400/mo in rent and laundry, making the rent $425/unit.  This could be upped to $495/unit and still be below market rent, which would make the income potential to be $5100/mo.  I am basing my numbers on the lower rent number as I am not able to see the place until Friday.

I must also say that my father has dabbled in investing in this area, and either owns or has owned (and rented) about 10 properties in the area.  He is the one giving me these numbers, although I am concerned they are a little low.  This could just be analysis paralysis kicking in as well.  So, I am here presenting his numbers to see what you guys think and go from there.  The rent numbers above I completely agree with, as the higher of the two numbers is still lower than what I was originally thinking they should rent at (based on my initial analysis so far from comps at $550/mo and beyond).

The initial mortgage would be for $240,000 @ 4.25% 20 years for a monthly payment of $1486.  We would ask the seller to carry back $52,000 @ 5% 10 years for a monthly payment of $552.

Mortgage 1: $1486

Mortgage 2: $552

Taxes:  $333

Insurance: $250

Repairs: $400

Pest Control: $20

Water: $100

Electric: $350

Trash: $100

Replacement: $200

Vacancy: $220

This gives him a total of $3911 for all expenses (including mortgages) leaving $489 available for cashflow.  He thinks a great deal and I should pursue it.  I am not as sure.  A couple of things I think he is leaving out:

Management: $440/mo.  This is something that I will not necessarily need at first, but I will want it at some point (possibly before I get Mortgage 2 paid off).  This would pretty much leave me with no cashflow once I add this in.

Other Capital Expenditures: $300 per month on top of what he has for replacement (which I think may be low anyway - he tends to only want to replace stuff when it breaks, but I want to be able to rent my place, so remodels need to happen every once in a while).

As it stands now, I don't think I would be cashflowing for 10 years, and even then, it would be just a bit.  Maybe he knows something I don't.  It's hard to have a good conversation with him about it, as he is in Afghanistan and we are communicating by e-mail.  Every time I send him something saying that I think his numbers are low or that I think he is missing things, he just writes back telling me to use this spreadsheet he made to go to the bank and see what they will give me on a loan.  So, I don't know exactly what he is thinking.

That's why I am on here with this awesome BP community.  Is my dad right?  Is this a good deal from your eyes (clearly, I don't expect you to know the market).

One more important detail. This property is being sold FSBO by an investor who has been doing it for 40 years. He told me over the phone that he is liquidating to be able to retire. He doesn't want to be tied down to the property, so the idea of seller financing does not make him happy. He would rather someone come to the table with the down payment. I told him that if he would work with me, he might be able to get away from the property faster, and give him cashflow in retirement that would require no work on his part. He doesn't know that my dad has already done some investing in properties (and could back me up financially if needed). That's another dilemma for me. I don't want my dad backing me up financially. I would love to do this on my own, but my dad being a somewhat successful investor could play in my favor with earning this guy's trust. That and showing him that I have at least had a good education and just need some experience under my belt to make it work.

I will update on Friday as to what my conversation with the seller was, but I would like to get some feedback before Friday so that I have a good general idea of how good a deal this is.  If it's something I should be interested in at current rental rates, then I will be more willing to work with the guy.  If not, then it may not be worth pursuing.  If rates were really at $5100 now, then this would be something I would be much more comfortable with as my cashflow before Mortgage 2 is paid off would be about $450.  Right now if you include my concerns, cashflow would be about -$250 for 10 years.

So, what do you think?  Should I pursue this or move on?  Are my dad's estimates good, or do I need to rework them?  Any and all advice is appreciated.

Thank you!