Does this look like a good deal? My first ever

[Chris Y.]

Hi Everyone, 

I am a REI newbie looking to purchase my first investment property soon. I came across a wholesaler in my area (which is expensive from property tax viewpoint), who has a deal for me. It looks all right but I wanna make sure my strategy is proper and see what you guys think. Thanks in advance for your time.

Duplex, (currently in rent condition, but could use some repairs and new hardwares, close to college in a small town, lower income area, no significant appreciation expected)

Asking 125k

1-hr drive distance

rent 2000 (tenant pays electricity heating water)

It is nice to meet the 1% rule but it requires all cash purchase or hard money loan, which is the biggest headache, but not impossible with all cash.  I could use delayed financing exception to pull my fund back right after without waiting 6 months. This is where I am not very sure since I have never done this before. But my calculations are

Appraisal 160K

LTV 70%

Loan 112K (lower than borrower's contribution in the deal so this is what I get)

So my total output: 125K (purchase) + 3k (est closing) + 5k (rehab) = 133 K

minus the loan 112k 

out of pocket left in the deal 21k 

My monthly cash flow

mortgage 600

property tax 340

expenses: 300 (trash snow sewer insurance)

cash flow = 2000 (rent) - 600 (mortgage) - 340 (tax) - 300 (expenses) = 700 (to round it up)

cash on cash return = (700*12)/21000 = 40% 

Which is probably not a great return in many people's mind. I am considering moving forward, but my questions

1. Can i surely get delayed refinance? If I cannot, I would be stuck. What are the rate and term like? Would it be 30 year and market rate?

2. Does the purchase price look too high, since I will end up leaving money in the deal rather than pulling everything out through the loan.  I guess potentially with some rehab the value could go up to 170k, so 70% would be 119K.  I still would not be able to get my rehab cost out. 

3. I am not considering the repairs and the PM in the analysis. PM could be another 200 eating into the cash flow which would lower the return to just under 30%. 

4. PM said a rehab of 10-15K could improve the conditions quite a bit and be made more appealing to renters. 

Is this something I should seriously pursue?

Thanks all,