Would this be a good first deal? Requesting feedback!

[Jonathan Streufert]

Hello everyone,

New real estate investor here in the metro Detroit area. I've been roaming the MLS for a little while now and think I've come across a pretty good deal in this seller's market. It's only been on the market for a couple days but I think it's going to go fast so I'm considering putting in an offer today.

The house is 3Br/1Ba, 912 sqft. I would classify the house and neighborhood as around C+ to B-. It's across the street from a large field and a K-12 school is about a 2 minute walk down the street. It doesn't have a basement or any potential for adding another bedroom or bath, but the house is overall in good condition. Only complaints my agent and I found were no a/c (it's Michigan, it happens I guess), an older furnace that might need to be replaced, and potentially a need to replace the circuit panel and/or think about the possibility of aluminum wiring since the house was built in 1970. Below are the numbers I've been using for my calculations:

Asking/purchase price: $55,000

Down payment: $11,000 (20%)

Loan amount: $44,000

Interest rate: 5.125%

Term: 30 years

Closing costs: $3,000

Estimated repairs: $6,000 (this is for adding a window a/c unit, furnace purchase and installation, circuit panel replacement, and possibly replacing aluminum wiring with copper. I haven't had an inspection yet, and this would be negotiable with the seller, but I'm assuming to pay for it all myself to be conservative in my numbers)

Total cash in the property: $20,000

Estimated rental income: $800/mo (it could possibly be higher)

Vacancy: $64.00 (8%)

Repairs: $40.00 (5%)

CapEx: $80.00 (10%)

Property management: I will be managing on my own

Electricity: Tenant pays

Water: Tenant pays

Gas: Tenant pays

Sewer: Tenant pays

Trash: Tenant pays

Lawn: Tenant pays

Insurance: $50.00

Taxes: $91.33

Misc: $50.00

Total operating expenses: $375.33

NOI: $5,096

P&I: $239.57

Monthly cash flow: $185.09

Cash on cash ROI: 11.11%

I feel like I have enough of a cushion in my numbers to imagine my ROI will be higher than that, but if the worst case scenario has me getting an ROI of >10%, I'd feel pretty good about it. Are there any expenses I'm forgetting, or does this seem to be a pretty killer deal overall?

Thanks in advance for any feedback you guys can offer!

[Brian Mcguire]

 As a example : Im closing on a duplex next week, Listed price was $135k, i offered $108k , they countered @ $125k , we settled at $120k. My bottom line was $121k which is after all said and done 1/2 of duplex covered all expenses. I dont worry about other people, its whats best for me and what works for me that matters.