Bad neighborhood rental

[Mark Jones]

Hello Bigger Pockets Forum participants. My name is Mark and this is my first post. I've been perusing the forums for a few weeks now and have been listening to the podcast for a couple of months. My background is as an engineer (all about the numbers) and long time investor in the stock market. I have been learning about the benefits of real estate investing from a new perspective (i.e. cash flow quadrant, tax benefits, etc) that have made it clear to me I want to diversify my investing into real estate and not just the market. I want to start out small so that I can learn, and so I am looking for some advice on what I think is a reasonable first purchase.

As a preface, I am not entirely new to real estate, just real estate investing, as I have bought and sold many primary residences.

Asking price is $100k for both a 2/1/750sqft and a 1/1/750sqft. They are SFH's on a single lot. Both homes are occupied and generate a total of 1400/mo in rent. Tenants pay water and elec. Trash is part of tax bill. The larger home is concrete block with central ac, the smaller is stick built with window units. There is a septic system rather than city sewage.

Location is in a rough neighborhood that is adjacent to a growing popular area. Crime is higher but there are some houses that have been fixed up and sold for 140-150 at the 2/1/<1000sqft size. Habitat for Humanity built a nice new house next door a few years ago that still has excellent curb appeal.

Tenants in the larger unit were evicted for not paying. New tenants in place that are paying. Smaller unit has tenant since Jan, paying on time. Current owner has had 2 total evictions in his 4 years of ownership. He acquired the property via tax deed cert.

I need some help on my proforma assumptions. Here is what I have:

PM - 12% ($168)

R&M - 5% ($70)

Vacancy - 15% ($210)

Turnover expenses - 5% ($70)

Capex - 2% ($28)

I feel good about my other expenses (PITI, pest mgmt, landscaping), but having not been a landlord before, and so I am wondering if these are reasonable assumptions? Are there other things I should be accounting for since this is a low-income rental with 2 evictions by the previous owner in the last 4 years?

Thanks!

Mark