Lease Option on a 3-Unit Complex (Negotiation)

[Edward Beard]

Good Evening,

*Please Keep in mind this is my first Multi-Family Property, $5000 is the most I am comfortable playing with for right now*

I am currently in negotiations on a 3-Unit Complex (all units rented), bringing in approx. $1400 per month. The owner is trying to structure a lease-option with the following terms.

1.) Two (2) Year Lease Option with $95,000 purchase price
2.) $5,000 Option Deposit
3.) $1,000 Monthly Rent; $500 monthly will be applied to principal balance
4.) Lessee is responsible for the payment of taxes ($1500 annually), insurance ( approx. $1000 annually), and utilities (not sure at the moment)

Question #1.) If the units are individually metered, what utilities are the owners usually responsible for?

Question #2.) After taxes, insurance, utilities, and management, there is little room for profit. 2 units have 11 months left on the leases the other one has 5 months left. I know that I can raise rents to increase cashflow, but is it worth taking the small profit-margin, short term?

Please let me know your thoughts, and possible counter actions I can take. Thanks in advance.