Advise needed on Duplex purchase

[Aaron M.]

Hi all,

I could use some feed back on a potential deal.

-Side by Side Duplex located in good neighborhood

-3 Bed / 1 Bath

-Asking Price 118K

-Both units rented ($750 and $775)

-Taxes  $2800

-Insurance $1200-1300

-Sewer $400

-All other utilities separated and paid by Tenant

-Other Factors 5% Vacancy, 5% Repair & Maintenance, 5% CapEx and 10% Property Management

Upon drive by the property seems to be in good shape.  

The financing behind this would be a commercial loan (20 yr @4.45%).   

As it sits it is a 8% CoC with $183 monthly cash flow which really does not excite me.

My thoughts are with minor tweaks (slight rent increases $25 per unit, and a 110K purchase price) the numbers start to work. This would bring 12.5% CoC and $264 per month cash flow. In our area I don't think its a GREAT deal until we hit 18%+ CoC and get cash flow in the $350+ range however given the neighborhood I think I am willing to accept the 12.5% and $264.

Another thing I have thought about is that because we are purchasing this under and LLC we need commercial financing. The bank we work with is great and have the best deals around that I have found. The down side is they don't offer 30yr commercial. Simply switching the financing from 20yr to 30yr makes a huge difference. So what may be a great deal for someone that can do 30 yr turns out to be only so-so for me. Should I put any weight in this?