First deal needing major renovation: proceed or terminate the contract?

[Mary Pastoral]

Hi, so far the properties we have bought in the past only needed under 15k in repairs. This will be our first property that would need major repairs. 

Up (2 bed/ 1 bath)  and down (1 bed/1 bath) duplex located in a B-/C+ neighborhood in Cincinnati

Purchase price: 147,500

Estimated cost of rehab: 38,050

ARV 215,000

Rent-income: 2,045/month

COC ROI: 7.75%

My hesitations:

1.  It's a 2 car driveway but it will be very tight for two cars. So solution will be rent the garage to upstairs tenant and street parkin for downstairs tenant. It's along a relatively busy street that does not allow street parking, so tenant would need to park in a nearby side street.

2. It was built in 1910. So there may be more repairs needed in the coming years that are not covered by the initial 38,050 repair budget.

Does this sound like a good deal, or should we terminate the contract? Thank you all!

[Patricia Steiner]

No...a 1910 house will require more repairs than ever revealed from an inspection or walk-through.  I own one of these 'historical treasures' so I know first hand the required and continuous maintenance that will come your way. Also your insurance expense will be higher due to the structure's age.  I also caution in taking on more than double the rehab expense you've incurred in the past - especially with a property that isn't tenant friendly from a parking standpoint; it won't be long before the trekking tenant discovers that trolling for street parking isn't the cruise he signed up for and starts parking in the yard, squeezing in the driveway, or starts claiming defects with the property so he can terminate the lease. 

I recommend walking from the property due to its age, rehab expense (which will likely go higher than estimated), and the parking challenges.  Just my two cents...hope this helps.

Best...