Is this a good deal for Norcross

[William Alamillo]

Norcross, Georgia that is...

This would be my first deal, so I'd love to get your input on this.

I have a friend who rents a town home in Norcross who has a TERRIBLE land lord.  I know that she is willing to sell the place because she has offered to sell it to the tenant several times for 65K.  I don't think it's worth that much, but I ran the numbers and even at that price, it seems (to me at least) to make sense.  I will not purchase it at that price - I'll try to talk her down to something reasonable - but tell me what you think of the numbers.  The "Bottom Line" numbers are, fittingly, towards the bottom - Cap rate, cash on cash, etc.

COST ASSUMPTIONS
Purchase Price	$65,000
Down Payment	$13,000
Improvements	$5,000
Closing Costs	$3,000
Other
Total Costs	$73,000
Cash outlay	$21,000
INCOME ASSUMPTIONS
Total Rent 100%	$770
Other Income
Vacancy Rate	10%
Total Gross monthly	$693
Total Annual Gross	$8,316
TOTAL RETURN
Appreciation	1.00%
Equity
Tax Break/Penalty
Total	$650

FINANCING ASSUMPTIONS
Down Payment	20%
Financed Amt	$52,000
Down AMT	$13,000
Interest rate	5%
Mortage years	30
Mortage PMT	$254 (includes tax and insurance)
Including tax and ins.
EXPENSES	Monthly	Annual
Property Taxes	x
Insurance	x
Maintanence	5%	$416
Management	6%	$499
Advertising	20	$240
Cap Ex	$100	$1,200
Utilities	$0	$0
HOA	$20	$240
Total Expenses	$2,595

NOI	Income -	Expenses
$5,721	$8,316	$2,595
Cash Flow	NOI -	Debt Service
$2,673	$5,721	$3,048
Cash on Cash	Cash Flow /	Investment Basis
12.73%	$2,673	$21,000
Cap Rate	NOI /	Property Price
7.84%	$5,721	$73,000
Total ROI	Total Return /	Investment Basis
15.82%	$3,323	$21,000