duplex purchase advice

[Gardi A.]

hello all i need some advice from the professionals here. i have a deal asking price is 129k BUT i don't have the down deposit and the closing cost funds. I have someone willing to lend me the closing and down deposit repayment terms 5 years.

now when i run my numbers the property cash flows $544 monthly that 544 would go to the person lending me the money meaning first 5 years i would have 0 cashflow. is this a smart move or dangerous. i see it as since everything is fairly new and my current property manager manages this property as well i would add another duplex to my portfolio with 0 cost to me

more details about the property below

One furnace new in 2014

Newer water heaters

New Roof 2015

New Electrical service 2015

Exterior painted 2015

All New windows 2014

New Kitchens 2014

[Kevin Hunter]

@Gardi A., it sounds like a decent deal to me except for the $0 cash flow for the first five years.  I understand that is due to the terms of the short term note, are they flexible.  Can you change the amortization structure in order to gain a bit of cash flow each month?  Does your private money lender want any equity in the deal?  You might be able to give him a small equity stake in exchange for a better rate or term.....  

Lastly, what is the place worth?  Will you have any equity in it right off the bat.  Can you add any equity to allow you to refinance and pull out the private lender's money and pay him/her back sooner to gain back that cash flow?

Just things to think about.