Ready to pull the trigger - should I?

[Joe P.]

Hi all, found a property I'm close to ready to moving on. Seller and I are about 4k apart in purchase price but I'm using their selling price for number eval:

Neighborhood: C+/B-, I would live here if I needed to. Its a quaint older town near public transportation and very close to a bridge into Philadelphia. Buying for cash flow, I don't expect much appreciation in the area.

Property: Basic property, seems to be in very good shape. Won't need anything for a bit but I will check with the inspector. CAPEX is set to 10% just in case.

Purchase Price: @125,000, Cash down is 25% (31,250), assuming 5% in closing costs ($4,687.50), 30 year fixed mortgage @ 4.5%.

Income: Rents 2 units (a 3 bedroom and 2 bedroom) for $1060 per month, each. I think this is low for the area; the 3 bedroom should be 1200 per month. But lets assume we don't change this - $2120 per month in income.

Monthly Expenses:

• Mortgage:  479
• Insurance:  80
• Taxes:  349.67
• CAPEX (10% of rent): 212
• Vacancy (8% of rent):  169
• Maintenance (8% of rent):  169
• Heating:  89
• Electric:  59
• Water:  89
• Property Management (10% of rent):  212 (I am managing it for the foreseeable future)

Income - Expenses = Cash Flow

2120 - 1908.87 = 211.13 per month, 105.57 per door. If I keep the property management for reinvesting, cash flow is actually $423.13 per month.

COCR: 7.05%

Cap Rate: 20.35%

Am I missing anything? Seems like a solid deal for cash flow and if I can improve rent to 1200 for the  3 bedroom, 2260, its even better.