Is this deal cutting it way too close?

[Corey Woodruff]

This is going to be a subject to deal. It is closer than I usually would even consider but since I dont have to get my own financing I am considering it. They only have 10 years left on the note and then I will own it free in clear. So my motivation is that in ten years it will cash flow greatly! 

what do you guys think ??

https://docs.google.com/spreadsheets/d/1AVoICWBDjs...

follow that link i have all the info you would need to tell me what you think, am i missing anything

[Andrew S.]

Corey,

a couple of thoughts upon taking a quick glance at your spreadsheet:

I don't see property taxes accounted for?  For the 2nd property, do you mean to say that the insurance is included in the mortgage payment (escrow)?

You don't have a CapEx or a property management expense line. You may be planning on self-managing and thus not count PM (though that means you are working "for free"), but CapEx is an important piece in my opinion: you probably have three sets of appliances, HVAC, water heaters, etc to deal with for each property. Are all of those brand new or will you have to replace several or all of those in the next few years? What is the condition of the roofs for these properties? You may need to set aside significant cash to plan for CapEx. If you allow for 10% CapEx and 10%PM you'll likely be cashflow negative on both properties.