Duplex Deal

[Kate Stallmann]

Hello BP,

I currently own a 2/2 condo in a good 4 season vacation town in NH.  This is my primary residence.  

Since discovering BP I have been thinking (some might say obsessing) about RE as a way to build long term income.  My husband is reluctant, but we looked at a duplex today that he's jazzed about,  which would be the first hurdle to buying something. 

My plan would be to buy the duplex under a consumer loan,  live in one side,  rent the other,  and use the condo as a vacation rental, which will conservatively cashflow about $235/month.  

($100/night with 25% vacancy = $2100/month ÷ 50% $1050/month. Subtract $815 which is what I pay for mortgage, taxes, and HOA dues, leaves $235).

I was planning to start seriously looking next year, since I am finishing up paying off all debt except the mortgage.  I happened to meet the people who are selling this duplex, and they are desperate to sell, they don't like being landlords and are tired of the hassle. 

This duplex doesn't meet the 2% role, rent would be between $1000-$1200 per unit and they are asking $200,000.  So 1 to 1.4%.  Tax is $6000 per year.  Before we get too deeply into the specifics, should I just walk away because of the numbers?  I am new at this and can't afford to make a huge, expensive mistake. 

Thanks for reading this far, and for any advice!