First Rental Property (Duplex in DFW Texas)

[Daniel Stratton]

I am a disabled veteran, I got another degree in actuarial science. I now work at Towers Watson as an actuarial analyst. I have my own home, mortgaged with a VA loan. I have a great deal of equity. My dream is to become financially independent, and I found a great Owner Financed property in Arlington, TX. I am looking for some advice as to whether this is a good or not?

It is a Duplex in Arlington, a DFW suburb. The owner is a Doctor and has moved to Costa Rica and is looking to unload his Dalls properties, which makes sense. However, Zillow estimates the value around $85,000. The owner bought it for $107,000 and is listing it at $100,000 OBO, I know he will take $95,000. I am planning on offering $80,000-$85,000; I assume he will counter with $85-90k. He offered terms of no money down, 5% APR, with a Mortgage PMT of around $475 in addition to $300 for taxes and expenses. With a total payment of $775/month. He says he has two tenants, HUD guaranteed rent at $1375 for both, net $600(approx.). Assume the renters have about a year left on the lease, and that they have been excellent Section 8 tenants, is this a good deal?

The gentleman claims to have updated the bathrooms and kitchens, including new appliances. In addition, a new roof 5 years ago, new piers and beams for the foundation with lifetime warranties, and a sprinkler system. The exterior looks nice, and it in a duplex neighborhood and he says he has had NO problems. I am taking a look at it tomorrow or the next. Assume the inside is updated as he claims and it looks to be kept up nicely, again, is this a good starter property? It's not a lot of extra cash flow compared to my salary, but I figured it is a start. Am I missing anything?

Thank you for your help, from a disabled veteran looking for true financial security and the ability to attain my dream of one day being able to afford my South Texas hunting ranch that I have sadly come to realize will never happen unless I take some risk.