Owner Occupied VA Loan Duplex Analysis

[Shaka Farrier]

Hello again BP, I hope all is well. I'd like to thank everyone in advance for your inputs. This is my first deal and I'm trying to make as little mistakes in the beginning as possible. 

Let's get to it:

Financing Option: VA Loan (owner occupy)

Property Characteristics: 

Both 3 bed - 1 Bath

Top-Bottom Duplex/(Unit 1) 1200+ sqft/(Unit 2) 1300+ sqft/Detached Garage 240 sqft/ Two washers/two dryers/electric seperately metered/ 2 water heaters (like new)/WATER NOT SEPERATELY METERED)/2 HVACS (like new),carpet (like new), fresh paint, roof is like new

Neighborhood: B-/C+

Asking Price: $224,900

Assessment: $215,100

Taxes: $1.15 per every $100 (so about $2,500

Insurance quote: $140-$150

Section 8 max for thsee unit approx. $1,200

Rentometer.com said average rents for the area for 3 - 1 is $1100. May be able to get more because of the washer/dryer availability.

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                        Owner Expenses 

Based on $1200 rent per unit ($2400)

Water: My BIGGEST concern!! The owner may be willing to get the units seperately metered. Approximately a $7000 project. 

I'm thinking that if the owner does this work, he will be less flexible with the negotiation and ask price. 

If I keep it and include water into the rents, I may be a section 8 family of a few people. Even having a flat rate for water makes me uneasy.

Property Management: 10% $240 (regardless if I do it myself or not)

Cap Ex: 10% $240

Vacancy: 5% $140

Taxes: $208/month

Insurance: $140/month (USAA quote)

Is it me or do my percetages seem a bit high.

I'm not sure how to budget turn over costs, repairs, maintenance or lawn care. 

I'm trying to find a offer that works without lowballing the owner.

I've gotten a few quotes for $224,900. I had the play with the numbers. Thinking about putting in an offer for $215,000 at 3.5% zero originaton, zero points.

P&I would be around $965

If I offer the asking price of ($224,900)

 P&I would be high $1300 low $1400

To the average person thay sounds great...live for free, but I really don't want to underbudget. 

This post was suppose to be short. Sorry guys. I just wanted to include any info I thought you might as for. THANKS AGAIN!!!