Rent too low, sale prices too high?

[Kevin Bryce]

Good evening everyone,

I'm about to take the state licensing exam and starting to look at my first real estate purchase.  The problem is, none of the estimating tools used on this site are making me feel comfortable about any properties that don't need a full rehab.

My plan is to purchase a duplex and live in one/remodel while renting the other.

Rents for my area are around $700-$1000 for a 2 bedroom 1 bath.  The low end of duplexes I've found is around $200,000.

So the 2% rule,  at the safe end of the spectrum, the 2% rule says I shouldn't pay more than $70,000...way off.

Then we get to the 50% rule.  with half of the duplex's total rents, $700 going to expenses , that leaves $700 for the mortgage and the profit.  A 30yr mortgage with 20% down at about 4% is $851 a month...again, not good.

So aside from visiting properties and praying maintenance cost is half what I'm estimating, what should I do?  Paying more down payment isn't an option.  Am I left with trying to find an area with more reasonable, I definitely don't want to do that.

Thanks for your advice in advance!

-Kevin