First Deal Need some advice --Rental--

[Nickolas T Philliber]

Looking to purchase 2 units, 120k for the pair.

I am going to put 20% down through a heloc.

The rest of the deal will be financed through a local credit union they are looking to do terms of  

3 yr balloon at 6.5%: 

5 yr balloon at 7.25%:

10 yr balloon at 8.25%

The units pay their own utilities so I will not have to worry about that I will rent the properties out for 800 a piece. 

Here is my math:

Rent-  1600

Mortgage-- 1000 ( after property tax)

HELOC repayment-- 212

Whats left:

$379

I know there is extra fees involved in this, what thoughts do you all have is this a good deal? 

[Jaysen Medhurst]

@Nickolas T Philliber, as far as expenses you're missing:

• Repairs & Maintenance: 7.5%
• Vacancy: 8-10%
• CapEx: 7.5%
• Management: 10% (always include, even if planning to self-manage)
• Insurance: ~$75/month? You'll have to confirm.
• What about water/sewer, garbage pick up? 

Can you clarify the loan terms? E.g. for the 1st one, is it only a 3-yr term? How long is the amortization? I think you can find better loans overall.

Including the expenses above, I show you -$247/month. Negative cash flow is non starter, as far as I'm concerned. What's the asking price. Unless you can get it for a lot less, I don't think this is a deal worth pursuing.