Numbers on potential first rental

[Joel Gulstrom]

Good Morning all,

Location: Maine, 45 min west of Portland. (Small rural town)  

Little about me. Engineer (full time), Landscaper (part time), Realtor (Part time). 

Looking for my first rental property. Have a client who I've worked with in the past who mentioned he would be interested in selling his primary residence. He's offered it to me as a rental property so I thought I'd run the numbers. It close to were I live and in good shape so I'm interested but before I move forward on it I'd like some opinions. 

The Primary house is a late 1800 early 1900 farm house. Its currently only a 1bd/1bath with 700 sqft all ground level. There is an enclosed access to the second story from both the interior and the exterior, but that space is unfinished. It has been framed out for another bedroom and roughed in for a bathroom. Because of the separate entry it has potential to be made into a studio apartment or I considered making it an office for myself.  Basement is Granite block. This is the owners primary residence and its in good shape. Heating system was replaced with a rinnai propane unit and is 5-6 years old. There is a functional dug well on the property, but the owner drilled a well when he moved in as he feels like dug wells are unsanitary. Roof is shingle and is in good shape.

The Second building is an 1100 sqft garage with 10ft ceilings. I suppose there is potential to rent storage there, but since its close by to my place and I run some side business that could use additional space I might occupy the garage. There is a second story above the garage and it has a 2bed/1bath apartment. It was finished around 6 years ago and also uses a Rinnai propane for heat. Hot water is electric. A new separate septic tank and leach field were installed for the apartment 6 years ago as well. 

I've asked a local landlord who has quite a number of residential rental properties in this area and was told to expect to get 1000/per and I could probably get $1200 if for the 2 bedroom. 

Financing would likely be %20 down using a Heloc on my home and the rest would be conventional. Shouldn't have any trouble staying under %3 interest rate at the moment. I'll admit I don't run numbers on rentals that much but I've tried to for this one. Looking for some feedback on yeah or nay. Positive or negative I'd appreciate your feedback. 

Thank you!

*I've rolled the electrical and heating costs into the rents. Not sure how to handle that yet, but I don't intend to be on the hook for either so for simplicity sake that is what was done below. 

Rental numbers	Month	Year
Purchase price	$225,000	$225,000
Gross income	$2,330	$27,960
Property tax (2020 rates)	$150	$1,800
Insurance (need quote)	$70	$840
* Electric (36 month average)	$210	$2,520
* Gas (69 month average)	$120	$1,440
Water (Private well)	$0	$0
HOA (None)	$0	$0
Vacancy %10	$233.0	$2,796.0
Repairs %10	$233.0	$2,796.0
Mortgage ($225K)	$950	$11,400
NOI	$1,314	$15,768
Cap Rate		7.01%
COC %100 financed		7.01%
COC %80 financed %20 down		35.04%
Net income after mortgage	$364	$4,368