Advice on possible owner finance deal
I need advice!
I have an offmarket deal for a duplex with motivated seller. Located in Fresno, Ca. Below are the following numbers
Asking price: $225k (below market)
Unit A rent $700 (Market Rents $900-975)
Unit B rent $725
Each unit is 2/1 and 1 car garage 900sqft
Expenses
Owner pays $130 for water/sewer/garbage
Landscape $30
Property is owned free and clear. Owner wants owner financed at 6% interest, 20% down (45k), for 3-5years.
At these numbers I’d be (-$200) monthly cash flow. My agent suggests I have room to increase rents. If rents move to market I would be positive $200-300.
How difficult is it to evict tennants and/or raise rents to market? Should I pursue this or pass?
I’m thinking on asking for a smaller down payment or ask for principle or interest only payments to make the current numbers cash flow.
Any advice would be greatly appreciated.