Would You Buy a Property With Hopes of Higher Rent?

[Ryan Mattson]

Hi All, here's a potential deal I would love some opinions on considering a fundamental decision must be made for it to be viable.

Triplex currently listed at $127k

Down Payment: $31,750

Gross Monthly Rent: $1,500 (500 each)

Estimated Expenses:

Mortgage: $500

Property Tax: $80

Property Management: (10%) $150

Water + Trash: $150

Repairs (5%) $75

Capital Expense (10%) $150

Vacancy (5%) $75

Total: $1,180 Monthly

Cash on Cash return: $3,840 (About 12% return on investment)

Property was built in the 1930's and states "could be rented for higher with work/repairs" 

Average comp rents seem to be around $600-700

If I could rent each unit for $600, updated ROI could be up to around 20%...

Is this a deal worth pursuing?

Thanks!