Duplex deal analysis. My first investment.

[Andrew Jones]

Hello everyone,

I purchased my first investment property a few months ago. I am looking to hold onto the property for the cash flow. Property is in Bakersfield California. I want to learn from this purchase as much as I can and purchase another one soon so feel free to be critical and honest. Tenants were in place when I purchased the property and I did receive the tenants security deposit equal to once months rent from previous owner. The property is a duplex built in 2006, Each side is 3+1. Both are rented to section 8 tenants. I did a personal walk through as well as had a property inspector look at the property and everything was good. I have had property management company in place from day one and they have collected all rents in full, but they have twice accessed a $30 late fee on a renter who only pays $100 as their portion. Also their has been about $500 in repairs done since purchase including pest control, plumbing, and lights/electrical. So here are the rest of the numbers:

Purchase Price 109,000
Total cash in $29,000. 25% down plus loan cost.
Total monthly rent $1820 (Each side pays $910) of which 80% comes from the Housing Authority (section 8) which has paid on time every time for several months.
Monthly Expenses
Mortgage $500
Water $80
Property Management $100
Property taxes $150
Insurance $50
Reserves for vacancy (10% of monthly rent to be conservative) $180
Reserves for repairs/maintenance (20% of monthly rent) $360
My time $100 (about 2 hours a month) reading over spreadsheet and emails from property management)
Total expenses: $1520
Monthly cash flow $300
Cash on cash return of about 12%

Again feel free to be critical and honest. I am hear to learn. Information about what I might have missed or should expect would be great. Thanks in advance for any replies.