Analyze This Bond For Deed Deal With Me

[Courtney Fricke]

Hey Y'all,

Have this bond for deed deal on the table that I'm analyzing. I like the terms and this is my first owner financed deal as well as my first potential rental property so I don't want those factors to cloud my judgement. Would appreciate any thoughts or input. Thanks!

Property(s): Two separate 1 bed, 1 bath cottage style houses on four shared lots in a desirable neighborhood for rentals. One is slightly larger in size than the other with an added office room. Non-flood zone. Central to town. Has two long term tenants in there for the last 12, 14 years. Decent condition. 

Owner Financing Terms: 

$120K Purchase Price
$3K Down
$117K Balance - Paid Over 25 Years
$400/month note
0% Interest
No Pre-Payment Penalty - Actually 10% Deduction of Balance to Pay Off at 15years

Unit A:
Current Rent - $650

Monthly Expenses: 
Note: 200
Taxes: 28.71
Escrow Services: 35
Insurance: 100
Property Management- 10%: 65
Maintenance - 12%: 78
Vacancy - 8%: 52
Garbage: 13

Total monthly expenses day 1: 571.71
-65 while self-managed = 506.71


Unit A Current Cashflow: 143.29

Notes: 
Market Rents - Around 700-750
Considering making tenants pay for garbage
Insurance may go up as I have yet to review the policy
Escrow services may be $35 for each property or $35 for both

Unit B: 
Current Rent - $475

Monthly Expenses:

Note: 200
Taxes: 28.71
Escrow Services: 35
Insurance: 100
Property Management- 10%: 47.50
Maintenance - 12%: 57
Vacancy - 8%: 38
Garbage: 13

Total monthly expenses day 1: 519.21
-47.50 while self-managed = 471.71


Unit B Current Cashflow: 3.29

Notes:
Market Rents - Around 650-675
Considering making tenants pay for garbage
Insurance may go up as I have yet to review the policy
Escrow services may be $35 for each property or $35 for both

Thoughts? Would you do this deal?

[Courtney Fricke]

@Jay Hinrichs just made a new thread - https://www.biggerpockets.com/forums/88/topics/575...

Bond for deed is the term in Louisiana but I believe it is the same as land contract in other states. 

Landlord wants to retire due to injury. Houses are in decent shape. Local market puts a duplex at around the $120K range. So it's fair in that sense. 

Thanks for the input!