I’m currently looking at a deal and would like to know

[Alex Diaz]

Hello I’m currently looking at a deal and would like to know what some of you think it’s a Single family home divided into 2 units with total rents of $2600 in a neighborhood I would consider  A- / B+ . There is numerous houses in the neighborhood and near the neighborhood selling for over $500K including the one right next to it that sold for $850K due to smaller houses being replaced with big newer ones. Purchase price is $283K, I do believe I can raise rents a few hundred dollars if updating is done. I am currently looking at 20% down with a 5.225% interest rate on a 30yr fixed rate since I am not eligible to go conventional or fha due to my employment history. All together I’m looking at 6K at closing + 20% down payment, and a 5% prepayment fee if I want to cashout refinance before 5 years, just wanted to get some thoughts on what more seasoned investors think given that this is my first deal. Thanks I’m advanced 

[Tim Johnson]

Not enough context and numbers here to give a full  response. However, using the following numbers:

Purchase price: 283K / Monthly rental: 2600 / Vacancy rate: 5% / CapEX and Maintenance: 5% each / Property Taxes: 3000 / Insurance: 1000 / Property management: 8% / Finances: 3% closing costs, 20% downpayment, 5.23% interest rate, 30-year amortized / Appreciation: 4% ....

I come up with 7.12% cap rate and a COC return of 8.03% . If you add principle pay-down and appreciation to that it becomes 30.54%

In my market that would be a green light deal. Of course, if you could update the home and bring in "a few hundred dollars more" of rent, these numbers would get even better.