Analyzing a Rental Property Deal

[Liam Morris]

I'm still new, but trying to practice evaluating opportunities as I see them.  Could you guys help me make sure my thought process is correct for the below opportunity?  Tell me where the holes are.

There is an opportunity to purchase 6 adjoining townhouse units for $77,000.

The listing claims Gross Rents of $38,700 (about $537/month/unit) and Net of $22,238 ($308/month/unit or $1853/month as a whole).  I'm unsure of what they have included in their evaluation of operating expenses to figure out the net.  That would be a question to ask.  Taxes are about $500/year.

If I were to bring $20,000 cash to the table and finance the remaining $57,000 around 4%, Mortgage payments would be $275-$300 (approx $50/month/unit).

So, if I subtract from the stated Net of $1853, 10% vacancy ($185), Mortgage payments ($300), taxes ($40), and 10% repair budget ($185) I end up with about $1,140/month.

So $1140/month x 12 = 13,680.  Divide that into a $20,000 initial investment and I'm seeing a 68.4% Annual return... which makes me feel like I messed something up somewhere...

Even if my numbers are a little generous, I still feel like I might be missing something.