Need Help Analyzing Potential First Deal

[Nate Rychlik]

  I found a duplex for sale in my old hometown, stats are 4/2 and 3/2. Current owner renovated each side and it appears ready to go. Currently both units are unoccupied and he is asking 195k. Conservative estimates are that I can pull in $2200/month rent total, assuming a 15% vacancy rate to be safe. The unit is located exactly 1 mile from a good sized state university and 1 mile from the newly revamped, busy downtown area. The main drawback is that the location is in a B-/C neighborhood, so I could never factor in appreciation. I've attached my calculations, again all done modestly. The current owner thinks renting each side for $1,250 would not be an issue and I will need property management as I'm located about 900 miles away.

   Now the other caveat, in speaking to the owner he said he is willing to do a 20-25% partnership on the property, which would take care of the down payment. My conservative calculations have cap rate of 7.35% and cash flow at $438/mo, is this a deal worth pursuing or what other factors am I not considering and need to? Also, what potential issues am I opening myself up to by partnering with the current owner? Here's my report, any/all feedback are appreciated as this would be my first deal!

https://bp-v-newproduction.s3.amazonaws.com/uploads/calculators/shared_report/report_file/5d8848bf-6328-47c7-bf5d-96ddb9580c90/report.pdf?X-Amz-Expires=601200&X-Amz-Date=20160819T030123Z&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKIAJ2DXENEECSJVAAQA/20160819/us-east-1/s3/aws4_request&X-Amz-SignedHeaders=host&X-Amz-Signature=269e379cef996002750f9635823fac280b3a77dc94cf614d25fd625a228237a0

[Daniel Hanson]

@Nate Rychlik I would also make very sure based on the market you could get that extra $300 of rent that the owner thinks could be gotten ($2200 increased to $2500).  It concerns me sometimes when a seller talks about potential rent increases but hasn't already done them on their own watch, you just want to know the reasons on that.