FHA loan on 2Bed duplex near train to NYC

[Josh Thompson]

I am looking for insight on what I think could be a good first deal. The property is 766 audrey Dr rahway NJ if anyone would like to look it up. It is a 2 bed 2 bath duplex in decent condition (based off pictures only). The list price is 154900 and taxes are 4491 according to Redfin. Its been on the market since july. I want to use an FHA loan as I dont have 20% to put down. This means I will be limited to only renting one unit for the first year. I can live with paying a little out of pocket in the first year to cover expenses if it means getting my foot in the real estate door. Rentometer says typical 1 bed 1 bath rents go for around 1500 in the area. Im not sure how reliable this number is, to me it seems high but not sure. I also understand 1 bedroom can be difficult to rent compared to 2 bedroom apartments, but this is a 5 minute drive to the rahway and linden trains to NYC. Does it sound like this could be a profitable rental? I am looking to cover most if not all expenses (taxes, pmi, mortgage etc.) from one unit in the first year. Then rent the other unit out after the FHA living requirement is done.

[Mark Taliercio]

Josh,

Are you working with a buyers agent? It may be worth working with one to better understand the neighborhood and project rental income. While I agree with @John Leavelle that the numbers may look attractive, I have serious doubts that a 600sf 1/1 will rent for $1,500/month in Rahway. 

Good luck with the search and I hope I am wrong!