townhouse deal

[Mike Landry]

Found my first motivated seller but I'm still on the fence on the numbers. I know it's a good deal for the area but...... For a rental. 

2 bd 2.5 bath townhomes (I think, 8 units connected)  1290 sq ft

Class A neighborhood. Top of the line schools, waterfront/golf community, just north of Houston. 15 minutes from my house. 

Purchase price $65000, 3000 closing cost, 68000 total. 

Current rents verified at $1000 per month. They where 850 in 2007 and have continually crept up. In line with rental comps if not on the low side. 

12000 gross rents

1750 taxes

2175 hoa and mx(lawn, trash, water, exterior MX) ouch

700 insurance

960 vacancy (8%)

600 my MX (5%)

NET 5815 - 8.55 cap rate

If leveraged which the seller will let me.

$13000 down, cc financed into loan at about $55,000

Debt service $278/ month $3336 / year

Cash flow $2479 or $206 monthly and equity of $70 a month starting out

Cash on cash return 19%

Exit plan

Hold for a year, small rehab sell for 80- 90k

Or hold long term 10+ years. 

Not too excited about it being a townhomes because I was targeting sfh but it seams like a good deal in an area with possible appreciation.  

Thoughts?