Nothing down deal. (Not to sure about this.)

[Gail W.]

     I am a new investor. I own one property that is cash flowing a small amount. I have had a package deal offered to me and after a bit of discussion the owner has offered a no money down deal. The owner will hold a note for 20% for 5 years at 4%, I will only need to pay the interest for the 5 years and then the note will come due. The bank has approved this arrangement and will loan the other 80%. I have appraisals for both properties. Property 1 is a 3 bedroom 2 bath in a good location, ( school across the street, 4 blocks from downtown) and good shape no known issues 5 year old roof new furnace and AC. Appraises for $60000. Property 2 is a 2 bedroom 1 bath in good condition in the worst part of town. Appraises for $28000. Both houses are rented for $500 a month. Price is $80000.  Taxes on property 1 are $1173, property 2 $724. The terms and the price look great but when I divide the two deals and analyze using $52000 for property 1 and $28000 for property 2, property 1 shows a slightly negative cash flow and property 2 is carrying the deal with a $240 monthly cash flow.  I am on the fence, I don't want a negative cash flow on any one unit starting out, even though my portfolio's cash flow will carry it, but the terms are, at least what I feel in my newbie condition outstanding. Any thoughts would be appreciated.