Negative Cash Flow, would you?

[Rob Krach]

So my current situation is:

$480 a month for rent plus $60 in utilities

I just analyzed a deal and am curious if this makes sense or if I am missing something:

Here is the deal and the numbers:

Offer would be $185,000, FHA Loan used with the welcome home IL program giving me a $5,000 to help with closing costs and down payment at 0% (for all intensive purposes lets just say that's tacked into the loan and un accounted for other than the all I will need to bring to closing is the $1,000)

my mortgage would be 30 years at 4%

My offer would include the below:

5% seller contribution to closing costs and down payment (FHA allows for 6% of the purchase price, but if I am wrong please correct me)

it is a 3 unit with 2 2beds and 1 3 bed

currently the taxes are $3,100

I guesstimated insurance around $1,550 (no clue seemed decent considering my experience)

current rent from the two 2 beds is $1,100 and currently i live with two roommates who would move in with me to the 3 bed, (each of them currently pay $480 for rent and $60 for utilities) if I offered them $250 - $300 a month plus we split utilities for our unit 3 ways they would jump on that offer)

if I guess that my total income will be about $1,600 a month and my expenses for PITI would be about $1,250

with the above I am making money and saving my $480 but now when I take into account Vacancy / Cap Ex / repairs / prop management (even though I will be managing this) I am guessing I would be negative about $150 - $200 (income = $1,600, expenses around $1,750 - $1,800)

Providing I live here for 3 - 5 years is this a deal worth considering?

What am I missing?

What did I do wrong in the aforementioned scenario?

A future thank you for the advice and comments,

Rob Krach