Is this Multi-Family a good deal?

[Darren Budahn]

I was looking at a 3 income property in Milwaukee, WI that is listed for $175,000.  It is a duplex and a cottage on the same lot.   The total monthly rent is $2,300 and it is fully rented--2 long term tenants.  I am not planning on living here.  The property is in a very good and popular area of town, although I'm not necessarily interested in buying it in order to speculate on appreciation.  I am interested in positive cash flow.  I actually went through the property last week and it looks in relatively good shape. The property is 3 blocks from my residence as well which is a bonus.

It seems as though the GRM and Cap Rate look good for the property, although I don't know how useful the GRM and Cap Rate are for a 3 income property. I also don't know specifically what a good GRM and Cap Rate are for my area, but it does seem to compare favorably to some others that I have run the numbers on. I have not yet gotten the repair/maintenance records for the past few years yet either which would obviously help me calculate the cap rate more accurately. I am fairly certain that vacancy would be low in this area, although I have enough reserves just in case.

I am planning on putting 25% down and also feel I could get the list price down a bit as it has been listed for 80 days without a price reduction.  The deal seems to pass the 50% rule.  Even if I paid full price at $175,000, my monthly principal and interest payment at 25% down would be $645.  50% of my monthly rent is $1,150.  Therefore, I'd have a hypothetical cash flow of $505 per month or $168 per unit.  

Any thoughts would be much appreciated as I am just starting and have much to learn.  Thanks.