Help me analyze this deal

[Marsha Rost]

Please let me know if you think this is a good deal.

It is a 2100sf single family which I want to convert into a duplex

Est rent for both units $2600

Cash Purchase price $240000

Repair costs $50000

Monthly tax after repair $550

Ins. $150

Vacancy 5%= $130

Capex $200

Property management 10%=$260

Repairs 5%= $130

If I refinance and cash out at 70% (assuming it is appraised for a little over $300000) and 5.2% interest rate monthly mortgage would be $1100

Please let me know your thoughts. Thanks.

[Brent Coombs]

@Marsha Rost, if you need to leave say $90k of your own money in the deal after 70% refinancing, then even if you cash flow $200/m (per Brian's figure), don't you agree that 2.66% annual return is nothing to write home about?  Just sayin'.

The main thing that says "no deal" to me is that you seem to be offering market value!

And, I'm among those folk here on BP who like to see at least the "1% Rule" met, where you would expect rent to gross at least 1%/m of purchase & rehab price.  This one doesn't*.

The main exceptions could be if: 1. You're buying at significantly under market value, and/or 2. You're expecting the future potential of the investment to outpace anything else you could do with your money!  Do these exceptions apply here?  Good luck...

* [That is to say, if: "Est rent for both units is" @ $1300/m?]