Analyze My FHA 203K Deal

[Randall Kates]

I decided to househack  a duplex  in Southern New Jersey Area   after  much back in forth between there  and  philly. This  house  was  listed at $79,000 but I  had to bid up to $91,000. I'm open to  any opinions on this  deal and your point of  view on whether this is  a good buy or  not. Thanks.

- Purchase price: $87,000

-Rehab Cost: $30,000

-Total Cost: $117,000

- Loan payment: 

$491.83 (principal and interest only) With financing at a 3.5% rate

- Property tax: $520.83 (Too Damn High For The Area In My Opinion But I Digress)

- Insurance: about $200 per month

- Management fee: $220  (10% or gross monthly rent)

- Maintenance/repairs (reoccurring): $220 (estimated 10% of gross monthly rent)

- Vacancy: $110 per month (5% per unit per month)

- Landscaping: $100 per month

- Total monthly expenses: $1862.66

- Rental Income: $2,200 (2 units renting for $1,000 per month)*Pro Rated For When I Move In A Year

- Cash flow: $337 per month ($2,200 - $1,862.66 = $337.34)

- Down Payment: $8,095 (including closing costs and cost of inspection)

- Cash on cash return: 11% ($337 x 12 = $4,048.08 Then $4,048 / $113,000 = 0.035 = 35%)