Good First Deal? Please help Analyze

[Justin Teal]

Duluth MN 1,400 square foot. 2 bedroom, 2 bath (although 1 of the bathrooms is in the basement and very gross) Renter has been there 13 years. The trulia estimate for the property is $116,000 but:

A: Property is pretty run down appearance wise, good bones though. Rewired 2 years ago, roof 6 years old, water heater and furance less than 3 years old. We are getting this before it hits the market as we know the seller who was double homesteading and has to sell the property due to that, she just wants to get rid of it ASAP. She initially said 70k and we said nothing over 50k and that's where we've settled until we see an appraisal. 

B: I'm not huge on trusting that estimate. We are just in the beginning stages of getting the purchase agreement drawn up by an attorney.

It also comes with a 2 door garage (filled with junk and broken windows). The nice thing is it is technically 3 lots. The one the house is on and the garage is across the ally with an additional empty lot behind it. (could possibly take down garage and sell the whole 2 lots together as well)

Anything I'm missing? This is more of an appreciation purchase than a cash flow one (I mean three lots with a house and a solid renter for $50,000 in a good neighborhood seems no brainer.)I was conservative with the numbers, not using a realtor on our side and I calculated property management in there but we won't be doing that either. Any extra tips for a first timer who's been lurking on the forums for a year or so?

[Sam Torvinen]

@Justin Teal this looks like a decent deal depending on condition. On a single family its not uncommon to have your tenants pay their own utilities so that could be throwing off your cashflow estimate! 

If you have the opportunity to do something with the lots to separate and sell for more that could present another opportunity.

I'm in the process of picking up a single family for $65K in Duluth, 3 bed 1 ba that should rent for $1100-1200 with tenants paying utilities. Subtract mortgage (~$ 550 w/ tax and insurance lumped into mortgage payment) and I'll pay trash ($40) and it should cash flow roughly $600-700/ month with a couple grand ~$3K, needed to get it into nice rental shape!

If you have anymore questions feel free to PM me or we could grab a coffee if your around Duluth!