Am I putting all of my cash into something that's not a cash cow?

[Simona Potocar]

I'm afraid I'm purchasing this property at too high of a price for the kind of returns I would want in the future. 

Based on the numbers below and the overall background of it - should I back out of this deal? Also if I do end up going through with it, how do I deal with the undermarket renter on the other side? Do I just raise the rent to what it needs to be and if she doesn't want to stay, then that's on her? I also forgot to ask about the security deposit she likely put down, am I liable for giving it back to her once she moves out? 

Background and Property Details: The property is a duplex, each side consisting of 3bed/1 bath and a 1 car garage. About 1,056 square feet of space altogether per side. Its located in Avon Lake, OH (a suburb outside of Cleveland). One side is rented at $1100/month with the lease going to July 2022. I think that rent is below market by about $150-$200.

It sits on just under half an acre. It's walking distance to the lake and several great restaurants and bars. It's in a fantastic school district.One side is already rented until July of next year for $1100 per month. I believe I can get the other side to rent for $1300 once I update some items like:

1. 1. LVP flooring in the living room
2. 2. Paint all rooms and trim a neutral and fresh tone
3. 3. Resurface countertop, sink, and faucet
4. 4. New range/stove
5. 5. New closet doors and doors for rooms - the old ones are in bad shape and brown, and basically ruining the aesthetic

Some of the downsides of the unrented side are that there is no dishwasher or microwave and the stove and dryer are old and will need replaced. Do I need to get a dishwasher into the unit?

I can barely find any comparables on rent because there's literally nothing on the market to rent, no houses at least. There are some apartments, 2 bedrooms mostly.Here are the numbers - this is an investor loan from a bank:

Purchase Price: $305,500

Insurance: $1132 annually

Down Pmt: 25%Rate: 4.5%

RE Taxes: $3561 annually

Assuming an optimistic scenario where I do get a tenant in the other side at $1300:

Cash on Cash return is conservatively about 8% and Cap Rate is about 2.19%

Added some pics so you guys can get a visual of the unrented side. The rented side looks similar but with laminate flooring.

If I'm in a bad deal - how do I get out? I've got a signed purchase agreement, waiting on financing. No contingencies except on the financing.