1st investment: are numbers reasonable and how to handle an offer

[Steven Primiano]

Hey everyone.  After years of studying and preparing, I'm ready to make an offer on my first investment property.  I've run the numbers and the deal looks good, but could really use a second look from someone more experienced.

Purchase price: $220,000, putting 20% down

Principal and interest: $900/month

Property Taxes: $4,500 ($355/month)

Budgeted expenses to be paid:

$350/month to cover cap ex (5%), vacancy (7%), and maintenance/repairs (5%)

$100/month insurance

$100/month to cover water, sewer, and garbage

Estimated rent $2,000/month

I calculate positive cash flow of $230/month

My questions are:

Have I budgeted enough for cap ex, vacancy, and maintenance?

The house was a rental.  What evidence can I ask the owner to show in terms of income and expenses?

The house was vacant, but the owner just allowed a "friend" to occupy it this past month.  There are 3 people living there with cats and, safe to say, no lease and rent-free.  What precautions should I take when dealing with the current tenants?

Thanks in advance for the advice!

Steve