Is this a deal? Niagara Falls/ N. Tonawanda NY Duplex

[Chris Lofstrand]

Hi All,

Wanted to get some peoples thoughts on a potential deal in the Niagara Falls/North Tonawanda area of Western NY.

1300 sq foot duplex currently rented and both tenants under lease

$550 upper , $700 lower

Seller is an investor looking to divest of the property. Currently owes $64k on the property and is looking to get ~$100k for it. Here are the numbers

Gross Rents $1,250

Property Taxes - $300/month (slight overestimate to be conservative)

Vacancy - 8% - $100/month

CapEx 8% - $100/month

Landscaping & General R/M - $75/month

H20 - $65/month

Insurance - $75 month (estimated)

i already know at current rent levels the numbers arent very good. But Seller said he may be willing to hold 2nd mortgage if down pmt is sufficient. So could i do something like this?

Assessed value is ~95,000

Offer $87,500

75% LTV investment property mortgage for $70,000 - $400/month pmt

Owner Holds $15,000 2nd mortgage 15 yr amort. with 5 year balloon - $135/month pmt (total interest pd 4,800 in 5 yrs)

I kick in $2,500 or so of my own cash so the owner ends up with around $7,500 cash after his note is paid off

my numbers would be awful for 5 years but i could stash away as much as i could during that time and after the seller 2nd was paid off I would have ~ $25k in equity that barely cost me $10k out of pocket...

thoughts?