What do you think of this deal? Thoughts welcome!

[Seth Domoto]

I have come across what I believe is a fairly good deal (should I obtain the property for the right price of course).  I plan to purchase the property with my brother so he will run property management.  Here are the details:

Duplex (Southern PA).  Move-in ready.

Asking price: $99,999

Best and final offer: $85,000

Financing: 20-25% down

Taxes: $2,627

Conservative rent: $1,000/month

Repairs budget: 5%

Insurance: $45/month (est.)

Property Mgmt: N/A (self-performed)

Based on these assumptions I am coming up with a little over 19% Cash-on-cash returns each month.

Apologies if I left anything out.  If you have any questions please ask, but I am open to any and all opinions or feedback.

Thanks!

[Christopher Brainard]

@Seth Domoto

I think your repair/capex budget is far too low, you're probably looking closer to 15%, but that varies by market and condition of the property. You also need to figure in vacancy around 8.3%. Additionally, you should figure in 8% - 10% for property management. If you do the management yourself, you can always pay yourself, but it gives you the buffer you need, in case you need to make other arrangements. Once you add these guys up, I think you'll be down to a more realistic cash on cash return level.

-Christopher