Is this overleveraging?

[Bryan P.]

I currently own two rental properties. I live in a rural area and my wife and I make about 55,000-60,000 a year. We live modestly as she stays home part-time with our kids.

Anyways, one of our properties cash flows well (it meets the 50/2 rule). The other property hardly cash flows but there's only 7 years left on the mortgage and the property is almost fully updated within the last two years. At this point I am able to pay for repairs for both properties if I had to dip into my personal savings, etc. I have very little consumer debt to speak of (although I have a car about to die and needs replaced). That's the background information you need to know.

A coworker offered to sell me her duplex on owner-financing at a VERY LOW 5% downpayment and no closing costs. Great deal for me. The property is worth 65,000 and it rents for 1000 (500 each side). On a 20 year payback (at 6% interest) the PITI would be approximately 600/month. With increased rent it would be close to the 50/2 rule, assuming I could increase the rent payments to 600/month which is feasible for our area.

I cannot pay for this property with my personal income if something happened. That's the risk if I do this. So please give me your opinion on leverage. Is this opportunity over-leveraging?