what do you think of this Duplex deal?

[Kirt Sangha]

Hey Guys, I found a duplex for sale that I'm thinking of buying. It has structural damage, I'm waiting for the report from the agent. Asking Price:500K and trying to get it for $475K Annual Rent: $32,160, I don't have the annual expenses yet. There are two detached homes 2/1 and 1/1. The 2/1=900 sqft ($1,440) and the 1/1= 540sqft ($1,240). What I'm thinking about doing is making them both into 3/2 1,100 sqft each and the market rent is $2,500 for a 3/2 which would put it to $60,000 gross. The AVG CAP in the area is 4.94%. I am using 15K for expenses (if you have a more accurate number let me know) which would put us at $45K- NET. Then flip it for $835K which equals to a 5.3% CAP. PP=500K ADDITION+landscape+Repairs+closing costs===$140K So ALL in 640K. There are some comps selling in the area with Gross Incomes of around 30K for mid $700's. A triplex with 43K NET is active for $950K. What do you think?