Analyze my Deal please!

[Michael Rodrigues]

Hi all, Looking at a 2nd rental property for cash flow and long term hold. I've found the following, please let me know what I may be missing as far as my numbers. In Utah: healthy market in this city with projected 4+% appreciation projected for next year. Also this city is in many top ten emerging city lists. But really I'm more concerned about cash flow than equity increase. Listing price: 259900 Duplex (2 units, each are 3 bed 2 bath) Current Rent: $1000/unit, $2000 total/mo 20% down, just under $52k down Estimated Mortgage 30yr @ 4% (est) = $1322/mo That is assuming: $3350 in property taxes and $600 ins. Current Property Manager = 8% gross monthly rent 100% occupied with potential to raise rent Monthly costs: $1322 debt payment $160 property manager $279 Property tax (would be a yearly payment in full) $50 insurance No HOA = $1811 Rent- $2000 potentially able to raise it to $2200 If I calculated the cap rate correctly it's around 6.8 Doesn't seem like great cash flow, right? Am I missing something? I know I can offer a lower purchase price. Thanks for the help. I know I need to look into the 50/2 rule as well, haven't done that yet. Still learning. The 2% rule, if I'm calculating it right, says I should be getting over 5k in monthly rent? Doesn't seem right? Or is this just really that bad of an investment? My other townhouse cost me $178k 5 years ago and currently rents at $1400. Again, the 2% rule seems like i should be getting much more in rent, but that is the current market rent for that size townhouse in that area. Similarly, if monthly rent is $2000, that means $1000 will be expenses outside of my mortgage. Which doesn't quite add up, seems like my expenses would be lower in this case. Thank you!!