Analyze this duplex purchase with me.

[Blair Boan]

This would be my first purchase as a buy and hold.  Currently working on a flip, which should work out nice, but it won't sell before I would need to jump on this one.  So it scares me a bit but the numbers look good to me, but the one thing that holds me back so to speak is the rental rate not currently set at what I am "told" the rent should be and then resale value if I need to get out for some reason.

Duplex - Spartanburg SC

2068 sqft 2/1 on each side.

Asking price - $95k

Currently getting $550/month each side (owner rents to family) but from talking to property managers, etc, the rate should be around $700-$750/mo.

taxes - 2400/yr

insurance - $1500/yr (I'm told by mortgage broker)

management - 7% of rent

cap ex - 5% of rent (built in the 60s but very good shape with new (4yrs old) windows, roof, hvac.  Brick construction.

maintenance - 5%

vacancy - 5%

monthly principle and interest - $354/mo (if purchased at 90k)

lawn - $35/mo

Rough monthly expenses - 1022.15/mo

Rough rent - 1200-1500/mo

And just so you know - Im the type that will analyze something to death.  Perfectionist of sorts I suppose along with being nervous that if this unit doesnt rent at what I am told then how easy is it to off load a duplex?

Anyway - thanks for any help and Im sure I left something off so please ask any questions.  

[Thomas S.]

Your expense estimates are too low. You do not base expenses, maintenance, cap and vacancy on the present condition. Expense estimates are based on the life of the property.

Additionally the value of the property should only be assessed based on the present rents. If the rents are below market then the seller takes the loss for having been a poor business operator. You do not pay for future income.

Never set a value on what rent might be.