Critique This Potential Deal

[P M]

I have located a duplex in a transitional neighborhood that is presently rented on both sides, with combined rents of $900/month.

Through my credit union, I believe I can get a 2-yr ARM at 3.75% for 30 years. They do not require PMI and have only a 0.75% loan origination fee.

THe owner is asking $70,000. I'm thinking I should aim for between $44k and 56K using my methods separate from 2% and 50% rules.

What do you think?