I cant make the numbers on this duplex work and I dont know why

[Bily Elliott]

I talked to my bank, I don't have a pre-approval per say, but I have a great relationship and I can get a 50K home equity loan (against my personal home, long story, bankruptcy and house going back means no conventional financing for a few more years) at around 4% for 15 years equals a monthly payment of $370 a month. There is a two story duplex for sale in a solid C neighborhood, working class, 700 sq ft and each unit is 2/1. Upstairs has been refurbished within the last 6 months (current owners are living upstairs while also re-doing the down stairs. Most of the work is complete, needs paint, carpet and finishing touches). Units are separately metered, they installed piers, and updated the electric. It has been on the market more than a month for 40K, I plan on looking at it later this week. Worst case scenario they don't budge on price and it takes 10K to finish the down stairs unit (I cant imagine it being 50K to purchase and be rent ready, but lets just run with that number because of pre approved financing). I own a rental property close (2 miles away) SFR 2//1 that I rent for $450 but it is tiny, 500 sq ft, I think each of these units should rent for $550 (rentometer.com puts that as reasonable and towards the lower end of rent).

Using the 50% rule $550-370 payment = $180/2 = $90 per door = horrible and unacceptable.

This property does meet the 2%, actually, almost 2.5% which is great (I think)!

This is what I know about the property. It was built in 1930 (this does not scare me, I am very mechanically inclined, plan to do all my own maintenance and repairs), last years taxes were $1054. That's it lol. I am just scratching my head at how a duplex in an area I want to be in, at 25K per door (I bought my SFR for 20K about 6 years ago) to me screams that it is a great deal and I would kick myself for not buying it does not cash flow. What am I missing? I love my SFR, had the same renter the whole time with virtually no maintenance needed on it. Am I the luckiest land lord in the world? Will this need constant repairs and dipping into the 10% funds of maintenance and capex and vacancy funds?

Sorry this is so long, I am just trying to figure out if this property does not work, what does?  The only thing I am seeing is since I am using 15 year financing, if I change it to 30 years (conventional financing) the monthly payment is only $238.  So if I take the 550-238 = 312/2 = $156 per door which still seems WAY too low.