Found a property Not sure if I should invest.

[Tamara George]

My neighbor is selling a duplex that currently has both units occupied.

She charges $1750 a month for each unit ($3500) which includes water and heat. She's askin 299,000; however she only owes 265,000. Minimal repairs need to be done. I want to offer her 270,000. 

Does this sound like a good investment?

[Matt Slykhuis]

@Tamara George  Is 279 Shannon Drive the property you are looking at? If so, here's how I evaluate that deal:

Monthly Rent: $3600 (you claim $2000 is possible but personally I would not pay more than $1800 due to the one car garage.

PIT: $1130 (estimating tax due to county site down for maintenance)

Management: $360 (10%)

Vacancy: $180 (5%, I usually use 10% but current owners claim history of low vacancy)

Utilities: $383 (assumes heat is the ONLY utility paid for by owner)

Maint/CapEx: $360 (10%)

Rehab: $5000 up front (This assumes not much needs to be done)

If your purchase price is $270k and you have a down payment if 25% for an investment property ($55,000), I calculate the cash on cash return to be 11.22%. This is decent, but not outstanding for me, especially since I lowered the vacancy factor from what I usually evaluate. 

Personally, I would only be interested in this property if the price were more like $220k. That gives a CoC of nearly 20% and, in my opinion, leaves a lot more room for error. Alaska is just such a unique market that I think it pays to be conservative on your deals.

Hopefully this helps you make a decision!