Currently In Escrow - Rental Property - Greenville, NC

[Matthew Vaughan]

Hello Team BP,

I'm new to the site but have been listening to the podcast for awhile. I've got an offer on two sfh in Greenville, NC walking distance of East Carolina University. The homes are currently being rented for $1,425/month, but need some work. I've gotten a quote from a contractor that is double what I was anticipating on spending for the repairs. I'm now trying to decide if it's still worth going through with the deal since the numbers have changed. I would only be losing a couple grand if I pull out now due to inspection/escrow costs. Would love any advice based off my breakdown below:

-total cost for the two homes: $265,000

-total anticipated costs for the rehab: $45k

-I would be putting 25% down ($66,250) + the $45k rehab costs for a total out of pocket expense of $111,250 (not including closing costs)

-once the upgrades are complete the two homes will be able to rent for $1,550/month minimum for a total of $3,100/month

What's the best way to calculate whether or not this is a good deal/investment given how much cash I'll be going out of pocket? I've tried the various calculators but want to ensure that how I'm breaking this down makes sense. It looks like I'll probably be looking at an all in cost of around $320,000 - meaning renting the properties for $1,550/each ($3,100 total) falls just short of the 1% rule. Does that make this deal a bust? 

Any advice is much appreciated.

Thanks!