Looking for feedback on deal in Lansing, Mi

[Paul Lucas]

Hello,

I have been looking to make my first deal and wanted to get some feedback on what others think of what i have found. First off, i am located in San Francisco so I am looking out of state, and I grew up in the Lansing area and have family there so i visit often. That is what let me toward getting real estate in lansing.

For the deal: it is a duplex with 5 beds and 2 baths (a 3 bedroom and 2 bedroom). No garages but each has their own driveway. They also have basements so they are pretty spacious. Also, both currently have tenants and i would be taking over the leases.  I have seen the leases and the 3 bedroom is paying $975/month and the other is paying $850 a month.

The duplex is listed at 160000k and my thinking is to put in an offer closer to 130/140k. With the 140k i would be paying $524 per month for the base mortgage, $392 per month taxes, and $105 per month on insurance. These are all numbers coming from actual companies i talked to which puts me at $1021 / month out of pocket for me with an income of $1825/month. I know this doesn't meet the 50% rule or the 2% rule but at least it meets the 1.x% rule :D.

For me the positives are that i would take over the leases and until april have some cashflow before having to do cleaning or anything like that to pocket some money for the renovations and cleaning at the end of the lease. Also the person who is paying $850 has been there for 3 years so it seems like a steady area. The cons are that the taxes are very high and im a little nervous since it doesnt meet the 50% criteria. As someone who is looking to get small passive gains and just dip my foot in, it doesnt seem like a bad option though.

Would love to hear concerns, feedback or things i may be not thinking about.  Thanks!

Paul