Investment property in Ga - Need help

[Chendra Grandhi]

Hello BP experts,

I live in bay area and this would be my first investment property. Any feed back or suggestions would be great. 

Duplex built in 1980s in Ga, Asking Price - 189 k B Neighborhood - low crime, decent schools, good median income in the area. I do see quite a bit of new construction in the area.

Down Payment @ 25% = 48K

Closing and other costs = 19K (Includes 6K finders fee)

Income

Rent - 1800 pm = 21,600

Vacancy @ 6% = 1,296

Tax = 1550

PM @ 10% = 2150

Repairs @8% = 1,728

Mortgage @ 4.75% 30 yr fixed = 8,860/-, Interest - 6,675/-

Net cash flow at 250/- per month or so. Around 5% COC.

Can any one let me know if this looks like a good deal? I know its not a steal :)

Also, I am told GA market is very hot now and can expect good appreciation in next few years. What is your openion/experience? Is 190K for a duplex seem to be appropriate for this area?

Thanks in advance

Chendra G

[Account Closed]

Chandra,

It's not a deal.  The numbers suck.  It's almost a guarantee you will regret for doing this deal in the very near future.  There's no 5% cash on cash return with those kinds of numbers.  I'm willing to make a bet with you now that you will regret for buying this deal within the next 5 years.  By then, you're likely $70k poorer unfortunately.