Condo Question for Rental

[Dave Mazza]

Hello Everyone.  I am a newbie for this and posted a similar question to another subject but wasn't sure if I should keep adding to it or start a new one.  I have more information that I didn't disclose from the beginning because I wasn't quite sure whats the best way and how in depth to be.  Bare with me on this and any advice you have, I truly appreciate it.

I am looking at buying a Condo for rental.  The association is made up of 21 units.  I lived in one in 2010 and instead of selling it, i rented it out and when I got married as we bought a home.  It currently is cash flow positive and I make 295/m on it.  Since I own that Condo, I am on the Board of the assocation and it is managed by a Third party who handles the financials.  I get a pretty good look at everything and a say on changes that could take place.

There is another condo a few units over that is for sale for 74k.  It is a cookie cutter copy of the one I lived in and currently own.  It has a new furnace, appliances come with the purchase price, and there is already a tenant in there.  It is is good shape with no major neccessities needed when I take over.   I met with the tenant already and did a walk through.

Purchase Price is 74k, HOA fee is 175/m which includes water, garbage, snow removal and landscaping. Taxes are 1700/year and it was built in 1979. Insurance woudl be 200/year. I would collect 850/m in rent and will have to put either 25% or 20% down (depending on mortage company I go with). Rentals are allowed and there aren't and restrictions of how many you own. The tenant would pay for all other utilities.

My questions are, do you think this is something I should move forward with?

Also, should I take the profits from my current condo and use that to pay down this unit?  I expect to make 242/m profit on Condo 2.  I expect to be able to pay off the 2nd unit within 4-6 years because I work in commission and get high bonuses on occasion.  Once condo 2 is paid off, I would then use that money to pay off my other original condo that I bought in 2010.  I have an emergency account of 10k to pay for what could go wrong. 

I know their are different schools of thought, but at age 29, the idea of having 2 condo generating income paid off within a 10 year period sounds very appealing and opens the door for lots of other opportunities.