My first deal - looking for feedback

[Brent Neuenschwander]

Hi all, first time poster that has just gotten into real estate investing. I took the plunge and am in the process of completing a short sale purchase. Waiting (for over a month now) on the bank to sign the contract, the owner has already signed. Here are the specifics:

Property is one building, 5 units, approx. 2,800 sqft. Three 1 bedroom units, two 2 bedroom units, all 1 bath. Range in size from 448-770 sqft with an average of about 550. Only one unit is currently occupied, although seller provided rental history for the last 3+ years showing steady history. She was getting $2,400/month when all units were rented (about $480/unit on average). Located in a small rural town about 30 minutes away from larger cities. One larger apartment complex in town that looks to cater towards section 8 tenants and currently has no vacancies. Other than that, a few houses for rent but not much else.

Asking Price $50,000

Sales Price: $50,000 (all cash)

Initial repairs needed (will be paid in cash): $35,000

1. New roof & gutters: $12,000

2. Paint portions of units/common areas: $3,500

3. Replace carpeting in one unit and clean floors: $2,000

4. Appliance replacement: $1,500

5. Misc electrical updates: $1,500

6. Misc plumbing updates: $1,500

7. Replace baseboard heaters (most are bad): $2,000

8. Patch a few cracks in foundation per inspection: $1,500

9. New 5 water heaters (30 gallon): $2,500

10. New vanities/toilets/tubs in all units: $5,000

11. Misc: $2,000 

Total upfront cost for purchase + repairs: ~ $85,000

Expenses:

1. Estimated yearly property tax: $1,000/year

2. Insurance: $1,100/year

3. Annual maintenance (lawn/snow/common area cleaning/etc): $4,500/year

4. Set aside for future capex: $3,600/year

5. Property management: $0 (will manage myself, at least to start)

6. Vacancies: $2,600/year (assuming one month vacant/unit/year).

7. Utilities: $1,800/year (owner pays W/S/T and averages $150/month).

Total yearly expenses: $14,600

Income: $2,600/month - $31,200/year (plan on increasing average rent from $480/unit to $520 - pretty comparable with other complex in town but might be optimistic)

Summary:

Initial investment: $85,000

Yearly income: $31,200

Yearly expenses: $14,600

Yearly profit: $16,600

So what is your feedback? Did I get a good deal? Am I missing something or are my estimates/assumptions way off? I have a few concerns. First, the fact that only one unit is currently rented. Also, I believe my initial repairs estimate is pretty close but might be low on appliances. Most of them are old and we are planning on replacing some with discontinued/scratch and dent. Will probably be replaced over time but not sure. Thanks everyone for your feedback! Let me know if I missed anything.