Duplex opportunity in central michigan

[Cameron Miller]

Duplex opportunity

I am from michigan and take home about 4k per month after taxes, 401k,insurance etc as a RN which ive been for 2 years. I have been wanting to buy a house for the past 5 years and never pulled the trigger. I currently rent and am very frugal , no debt, drive a used car, have a roth ira etc 

I have an opportunity to get a 1980 4 bed 4 bath ranch duplex ,full basement , one car garage per side,, new roof, original mechanicals duplex from a family member off market in a solid B to B+ area/country setting 1.5 miles outside of east side of city of 150k people. This side of town is mainly B to A- neighborhood. The duplex is on a road of duplex and single family all in the 220-320k range.

Purchase price is about 280k

I would put 20% down so loan for 224k

Taxes are about 5k / year

Insurance is 2800 / yr escrow or 2500 in full

Mortgage rate 7% credit score 760+

Mortgage is $ 2150 ish. +/- 50$

Current rents are 1000 per side which they say is low because it's paid off for my family member

They say market rent is easily 1200 per side

I would likely inherit a tenant on one side at 1000/mo , older retired single guy

So if I house hacking and pay 1200 and raise their side to 1200 it's would cash flow about 150$ not including maintenance so. Basically for the first 2-4 years barely any profit , to squeeze more cashflow would have to pay down mortgage ,refinance 5 years later. be super frugal , raise rent slowly and hopefully not loose this tenant by raising their rent. Part of me wants to do this so bad but the numbers in this market are so tight and it only makes the 1% rule after my down payment. Basically any cashflow is for maintenance for about 5 years .

Any thoughts from experienced landlords? If I could put down more money obviously that would decrease mortgage but I need some left over for closing etc