Is this Duplex a good deal?

[Robert K.]

I am looking at purchasing a duplex and struggling a bit with the numbers.

They are asking for $115K for a 2700 SF Duplex in Dallas. I expect 20K in repairs. The tax value was $215K in 2009 but dropped to $162K for 2010 and that is where it still is. The property brings in $1,700/month but will be unoccupied when I purchase it.

I am considering a 15-year loan at 5.99 of $108K. Excluding the use of a management company, I am looking at $185 net cash flow but only $50 with the use of one. With a 30-year loan (which I won't do), cash flow is more like $300/month including the use of a management company.

Using the 2% rule, I am at 1.25% in terms of rent as a % of purchase price. Granted that the 50% rule assumes a 30-year vs. the 15-year loan, I still think the numbers are a bit low. What do you think? Is this a good deal?

Your input is greatly appreciated!