Deal Analysis - 4/2/2 - Great ROI but tight cashflow

[James M Smith]

Ok I am going to say upfront that this deal has a few moving pieces and perhaps half the purpose of this post is just to organize my thoughts.  I would love to hear your opinions on this deal.

4/2/2 - Off Market Arlington, Tx: Purchase 128k, ARV 169k, Repairs 5k

1. Requesting roof to be repaired/replaced before closing
2. Some foundation work is needed (and accompanying sheetrock)
3. Has a current tenant, good payer, with lease till Sept and she expressed an interest in renewing the 2 yr lease.  
4. This is an interest only private money funded deal at 100% @ 3.5% for 18 months with an option for the investor to extend for another 18 months  (I know we are lucky to have this lender and they have asked I not share their info :)
5. Investor Money - COC ROI 88.72% with a cashflow of $288.33 (Operating expenses of $668 making sure to budget for vacancy/repairs/cap expenses)
6. If the Investor doesn't renew in 18months and we have to seek traditional financing then we would either sale, since lease would be up at that point, or refi.  
   1. Refi money - COC ROI 24.72% with a cashflow of 107.33 same Op Exp.

I am crazy for even second guessing this deal, right?  Basically none of my money in it... I just don't like the tight cashflow situation with a traditional loan option.

I look forward to getting the input from the group.  Please let me know if you feel like I have left out a critical piece, I tried to distill it down to the pertinent info out of respect for your time.

Thanks,
James