Would you? Buy and hold seller finance deal Ogden Utah

[Paden Anderson]

I have an option to purchase a duplex built in the 60's within a mile of Weber State. Its a 3 bed 2 bath up and a 2 bed 1 bath down. Gross month rents should be about $1800 a month. Sellers will sell the property for $175k with 25k down at 5% with a 5 year ballon amortized out over 30 years. I plan on putting an additional 5-10k into the property for upgrades. My debt service with taxes and insurance is $1000 a month and I have included about $300 a month for cap x and maintenance and $100 a month for water, sewer, and garbage. Well be about $400 cash flow a month. $4,800 a year divided by my 30k invested is about a 16% return. 

My hold up is this place is super close to market value. I may be able to sell it tomorrow for 190k after I do my work. I dont plan on doing that but I still like to have a little more equity after I buy than that. Thing I love is the amount of cash needed and terms. Ill have 24k out of the property after the 5 year balloon payment is up. Any thoughts? Would you purchase this in this market?

[Aaron K.]

It looks like the numbers are fairly solid and Utah as a whole is growing in population as long as you are qualified to refinance when the balloon comes do you should be fine.