Duplex - I'm on the fence!

[Mitch Mitchell]

Hey everyone,

I am considering purchasing a duplex that is on the market in my home town. The plan is to live in the bottom and rent out the top. The upstairs unit is currently occupied. I am going to have to go FHA since I do not have the funds for 20% down. The reason I say that I am on the fence is that I feel like it is just an OK deal and not a great deal. However, I will be having to pay my student loans back here soon and the rent from the top unit would help my situation tremendously. Any and all feedback is welcome. Here are the numbers:

Asking price: $86,000

Purchase Price: $82,000 (Seller pays all closing costs)

Principle and Interest: $375/month

Taxes: $85/month

Home Insurance: $25/month

Private Mortgage Insurance: $65/month

= PITI: $550/month

Rental Income: +$450/month from the upstairs unit

$550-$450 = $100 monthly payment for myself. I am currently living in an apartment where my rent is $475.

Hypothetically, if I was not living in the downstairs unit, it would rent for $525 a month so both units could rent for $975 (450+525).

I would manage the property myself since I would be living in it. CapEx I guess is kind of unknown it is a little bit of an older house that needs probably $2-3k in minor repairs and paint. The seller actually agreed to fix a few things out of their pocket. Roof is new, siding is new, about half of the windows are new, new boiler, new hot water heater.

Just looking at the numbers, should this property warrant my interest? Would you be interested in a property showing these numbers? Try to put yourself in the shoes of a guy whose about to get hit with $350 a month in student loans! (a number he cannot afford). Cheers!