Needing advice on potentially our first rental property

[Dalton Toelkes]

I’ve got an opportunity to buy a rental house potentially for zero down, but I’m not sure if this is a good deal or not. The current owner has offered to put up the down payment and add that onto the total price of the house so they’ll be paid back and we aren’t putting anything down. It’s currently listed at $180,000 he’s offered to put $18,000 down for 10% and then add that to the purchase price, making it $198,000 total.

This house is in a great rental area right across the street from a major med school, he’s had no problems renting it out in the past. The area should appreciate over the next few years as well.

Some of my concerns are:

1) There’s a tenant currently in there that we’d either inherit or need to kick out. He mentioned they’ve had trouble paying on time lately.

2) This place rents for $1,500 now, could be as high as $1,650 fixed up more but the total mortgage payment with taxes and insurance would be about $1,500-1,600. So we’d be breaking even or negative until we could refinance.

This would be our first rental and I think it could be a good opportunity long-term, but it feels like there’s some red flags here. Is this something you would pursue, or move on?