Near Turnkey property. Margin may be thin

[Jose Guevarra]

I'm getting this property in Memphis, zipcode 38128 under contract for $62,500. It was appraised at $84,000 by local realtor group. That zip code is growing around 25% year-to-year in median sales price(Trulia). I'm going to ask a buyer for $70,000 + $1,000 closing cost. My wholesale commission would be $7,500.

- It's owned Free-n-Clear
- Bad school district though
- Above surface pool!
- Taxes are $996/yr (city and county)

- Insurance $600/yr

Cash Flow

Rents in the area are about $845, 50% Rule for debt service and property management

$845/mo x 0.50  ~= $422/mo 

Cash on Cash Return

($845/mo x 0.50 x 12mo)/$71,000 x 100 = 7.1% Cash on Cash Return

Purchase Discount
Looking to sell it to Turnkey investor for $71K

($84,000-$71,000)/$84,000 ~= 15.4% discount on purchase

Seems like pretty simplistic set of calcs.  Would appreciate some feedback on these numbers or assumptions.  Margins may be thin for a buy-n-hold investor, what do you guys think?

Thanks.