Feedback needed on first deal

[Ari Bachrach]

Full disclosure: I'm already under contract for this deal, but since it's my first deal I want to get some feedback even though I'm going to be going through with it regardless.

I'm buying 2 condos in the same complex as a package deal for 140K. They're both 1 bedroom and about 800 sqft. Hoa fee is $430/mo each. Taxes are $894/yr each. All utilities included in HOA fee. Zip code is 20877 if anyone wants to see what the area is like.

Unit #1:

Currently rented to a section 8 tenant for $1410/mo. The unit is in good shape and already passed section 8 inspection. No work needed.

Unit #2:

Needs some minor repairs - estimates cost is about $1000 to replace a bathroom vanity, hand a curtain, and fix the garbage disposal. The going market rate for renting a 1 bedroom in the area is about $1250, although I could also do section 8 again for $1410. 

I'm using a line of credit to buy them. The interest rate is the 30 day Libor + 2.5%, so that means my current interest rate is 3.75%, and I don't have to put anything down. I will probably want to refinance at least 80% of that into something fixed at some point to hedge against rates going up.

Monthly costs:

* debt service = $441 (141,000 *0.0375/12)

* insurance = 78 (quote from Geico)

* HOA: 860

* taxes: $149 (it's $894 each per year)

* repairs: $100 (I'm estimating a little less than with an SFR because with a condo I don't worry about the roof, the hot water heater, landscaping, etc.)

total: 1628

Monthly income: $2660 (1410+1250)

Net: 1032

Cap rate = 8.7% (1032*12/141000)

Things I didn't include: closing costs, vacancy. I figured my margins should be high enough to make up for those costs.

Since this is my first investment, I'd like feedback.