New three unit - seller financing

[Greg M.]

Hey all,

 So I would like some quick feedback/review of a deal I have worked out, just to confirm it's a good buy and that I am not missing anything.  The property is in way upstate NY, a three unit fully rented, two 2 BR one 1 BR built in 1890.  The 2BR are $800 a month each and 1 BR $600 a month.  Total income is $2200 a month verified and I have other units a mile or so away which get the same. 

 My best estimate of valuation is about $80,000 based on comps in the area. I actually bought a 4 unit a mile away for $45,000 last year but that needed about 30K worth of work so I feel this is about right as this one is turn key with no repairs needed.

The seller financing deal - 

Sales price $63,500

Cash at close from me $5000

4 year note @ 4% for remainder ($58,500), monthly payment of $1000 with balloon at the end, no prepayment penalties.

Monthly projections

Income =     $2200

Expense=    $220 management

$220 CAPEX = No problems yet but "Unknown age" on the roof and owner has had property for 20 years

                     $480 Insurance/taxes = Total taxes for 2017 were $4982 on assessed value of $78000 plus $600 a year for insurance.

                     $220 Vacancy/minor repairs/maintenance

                    $220 a month for water/sewer/trash/landscape/snow (actual should be way less)

                     $1000 debt service

NET loss of $160 a month      

The cash flow is terrible of course, but that is mainly from the outsized taxes which was from what I can tell from tax records an extra school levy, total taxes for 2016 were  $2341 on same valuation. I want to confirm with the city of course but my actual taxes/insurance should be closer to $240 a month, leaving positive cash flow of $60 a month. Plus with the new sales price I should be able to bring the assessment down as well, leading to some additional savings on taxes there.

I have two possibilities for this property, the first being to get it refinanced by a bank ASAP to pay off the seller financing and bring the debt service down by about half.  I do not know if this is possible though on seller financing so I could use some advice there. And second is to take equity out of my other property and pay this off leaving me with that debt service which should be about half of this.

It is a good property, great price, good rents, but should I pass or move forward?