Advice on potential deal

[Kyle Stueven]

I am looking for some advice from more experienced buy and hold investors on a deal I have in the pipeline. I have an opportunity to buy a 5 plex built in 1980, consisting of 5 3 bed room 2 bathroom townhomes, for $450,000. The bank would finance 75% of the purchase price, I would put $20k down, and the seller would finance the rest of the down payment for me.

Both loans would be amortized over 25 years making the monthly debt service around $2300. The gross income of the property is $5450 monthly and the operating expenses including taxes and insurance is roughly $1800 per month (not including management). Leaving me with net income of about $1350 per month.

My concerns with the deal are I would be almost 100% leveraged and I would be using all of my cash to put the $20k down so I would be left with no cash reserve. My only capital to fall back on is a 7k line of credit I have. What excites me about it is the potential to add more income streams to my portfolio with a low down payment. Is it worth it to take the risk and jump on this deal? Let me know your opinions! Thanks in advance!