Central Cali Deal

[George Calbert]

BP Family,
I have a friend that asked me for advice on a deal. This is my first analysis on a property so I wanted my work checked to ensure I am giving good advice. I personally saw a 2.02% ($912 cash flow/$45,000 invested) return and I recommend he looks into another market with higher returns or deeper into his home turf for a better deal.
3/2 SFH, 1977, 1200sqft
Rent price $1,100

Market Value $160,000
Purchase Price $125,000
Down Payment $25,000
Closing cost $ 5,000
Rehab $15,000 (Paint interior and Exterior) (New carpeting)

Monthly Expenses
Mortgage $537 (5% over 30 YRs)
Maintenance $100
Management $110 (out of area rental)
Taxes $125 ($1600 Yr)
Insurance $52 ($625 Yr)
Vacancy $91 (1/12 of expected Rent)

My friend’s goal is $100 cash flow; I have him at $76 cash flow. I don’t think this is his deal. If he electes to do it what advice can I give him to improve cash flow.
George