House Hacking a Duplex - First Deal

[Sawyer Nyquist]

Hello BP,

I am under contract on my first deal in Holt, Michigan (just south of Lansing). Its a 2/1 duplex on a 1 acre lot just on the outside of town. My family and I are going to move into half and rent out the other half. We plan on living there for 1-2 years before moving out, so I am trying analyze the deal as if we were renting out both units (is that the best play?). The property needs some updating and so we are looking to put 15-20K. Nothing major, just paint, floors, counter tops, most of bathroom and part of the other one. We are in the process of getting quotes from contractors so my estimates will be more firm soon. 

Here are the numbers; happy to hear your thoughts.

Purchase price: $105,000 (with seller paying 3k of closing costs)

Repairs and closing costs estimate: $22,000 (we are doing a 203K so this will be wrapped in the loan)

Cost Basis: $127,000

DP: $4,445 (3.5%)

Loan: $122,555 ($557 monthly payment)

Rent: $850 per unit, $1700 total, $20,400 minus 10% vacancy (high estimate) 18,360 GOI

Annual Expenses: 

Taxes: $4400

Insurance: $800

Property Management: $2,040 (10%) We will be managing the property ourselves, but we would like this budgeted in for down the road when we might transition to property management.

R&E: $1,500 (roughly 7.5% of annual income)

Capex: $1000 (roughly 5% of annual income)

No water or sewage as it is on a well. 

Annual Operating Expenses: $9,740

NOI: $8,620

Debt Service: $6,686

Annual Cash flow pre-tax: $1,934 ($161.14 monthly)

I tried my best to overestimate on expenses, so I am optimistic that my total cash flow will be higher than $161 for both units. Any thoughts on this buy? Did I miss anything in my analysis? 

Sawyer