Trying to do my first investment - can you help me evaluate deal?

[Isaac El]

I found a property - its a small duplex.

It is two - 2 bedroom apartments

1st unit - paying $1,500 month

2nd unit - paying $1,300 month (not paying rent currently)

Total income $2,800

Tenants pay all of their own utilities

Land lord paying Taxes $3,300/year and water

Will need new paint, and some touching up.

Owner asking $575k

I am want to put an offer in, want to know if you experts out there could tell me if this is a good deal/bad deal and any input.

Thank you

[Ted Tackeberry]

Hello Isaac,

Here is how I would evaluate it.

$575-20% down= $460K financed. @6%= $2,760 per month

Total income $33,600 per year

                      -      $8,400 (I figure -25% for management, vacancies & repairs)

                      -    $33,120 annual payment

                      -     $3,300  for taxes

                     -      $ ??       water

                      -    $ ??       Insurance

                     =  $-7,920  already loosing money without water and insurance.  

Do you have any good comps that would tell you the value?  At first run of the numbers this does not appear like a good deal.

Hope this helps,

Ted