to mortgage or not to mortgage....comparable ROI

[Joe Boggin]

20k...

i can buy an inner city home tenant occupied unit. tenant pays 625 rent. taxes, insurance and water equal roughly 125/month and 10% monthly to maintenance leaves around 450 cash flow a month. i will even allot for variable BS and say 400 a month cash flow/5400 yearly with a ROI of 27%....i think i can get the property for under 20k but lets leave that to my stellar negotiating skills...

or

i can put down 20k on 100k home, mortgage with a 30 yr fixed. mortgage, taxes and insurance hover around 600. maybe 100 in repair but rents minimun are 1150. roughly the same cash flow and same ROI given my initial investment.

with the 100k home im gaining a dif neighborhood but debt service for years. with the 20k home its low income clientele but i wont have any debt service

thoughts?