Would you purchase this?

[Kristopher Sharpe]

Hello all,

First time posting on here. I have been reading and learning as much as I can about real estate and found a deal that I am considering but would like another perspective.

I live in a smaller town/city that has seen tremendous growth especially due to Covid-19 as we have been largely unaffected by the pandemic. That being said real estate is going quickly as people from larger cities are selling their homes and paying cash for real estate out here.

I found a deal this morning and have a showing tomorrow, I know the place already has a full asking price cash offer which will definitely be challenging to compete with.

The deal would be a duplex 2bed/2bath with garage, in unit laundry, a full kitchen, and both units have fenced back yards. The owner of the property passed away and their heir is wanting to get rid of the property. They are asking 280k. Both units are currently rented for 875 and 900, these units could both easily rent for 950-1050 per. 

I have enough for 20% down and could go conventional with this property, Taxes/Insurance/Mortgage would be right around 1200$ per month (I have taxes/insurance at 0 in the table below, its built into the 1200 under "mortgage"). There is a 15$ HOA monthly as well. I have set aside 100$ for repairs and 100$ for CapEx per month. I would be moving into one of the units and living there until I saved enough for a down payment for another property.

I am curious in BPs opinion, what would be the most I would want to spend on this property for it to make sense. I have completed the 4 square method and did worst case scenario that I make 950 in rent and paid 300k for the property and am seeing almost an 8% Cash on Cash return. Would this be a property worth potentially purchasing?

Any advice would be greatly appreciated!