Lease Option Opportunity

[LiDairious H.]

Good Day!

First Lease Option Opportunity just presented itself. A lady has 2 duplexes in a lower incomer rental area.

She wants: $47.5k for each Duplex with a 5 year option. She wants her PITI covered of $575 for Duplex 1, and $435.29 for Duplex 2. Plus $150/mo on both units towards the option. (Which is $9k over a 5yr term). --

These are single unit apartments, so: Unit 1 rents for $525. Unit 2 Rents for $535. (Duplex 1) Total of $1060.

Unit 1 rents for: $489 (section 8). And Unit 2 is Vacant but can rent for $500...btw (disclaimer: Unit 1 has a small leak coming from the siding on outside window into the bathroom, and may have caused slight damage, but this is the best of all units). Plus this Duplex needs some roof tuck work done...Could rent for total of $989.

Owner only pays water: Duplex 1's bill is about $84/mo. and Duplex 2 with no vacancy is about $84/mo as well.

All tenants are on month to month, no leases, but are long term tenants.

1060 - (576+150) - 84=$250 - (misc fees and vc rate) = $150 For duplex 1.

989 - (435.99 +150) - 84 = $319 - (misc fees and vc rate) = $219 For Duplex 2.

Would you take this deal? What questions should I ask, and what am I forgetting to look at?

The Duplexes are in decent shape, need cosmetic updates, and attention, but still renting.

With miscellaneous fees, vacancy rate, etc. I see a very small cash-flow number. What do you see?

Please Help!!!!