Please help me analyze this deal

[Sohil Vashi]

Hi everyone,

I found this property that I am interested in purchasing as a rental property. It is a 2 bedroom/2.5 bath townhouse with 1212 sq ft. The townhouse was originally listed for $120k and has now dropped to $105k after being on the market for about 8 months. I am hoping to offer $85-90k.

Here are the numbers I am running:

• Rent in area for a 2 bedroom is about $1200/month (based on Rentometer)
• Mortgage (PI) is $390/month (based on $90k with 20% down @5% interest)
• Taxes is $150/month
• Insurance is $60/month
• HOA I am estimating to be $50/month
• Vacancy (7%) = $84/month
• CapEx (10%) = $120/month
• Maintenance (8%) = $96/month
• Management (10%) is $120/month (I plan to do this but added it anyway)
• Total Cash Flow = $130/month

I have not seen the property but based on the few pictures I have seen, I think I will need to paint ($2500), redo flooring ($3000), redo kitchen ($7500), and maybe redo a bathroom ($5000). I am not sure if these estimates are correct though but this would be about $18000 in rehab work. Please see the picture and provide your opinion is i need to redo kitchen.

Here are my questions:

1. Do you all think this is a good deal or are the rehab costs too expensive to make this a deal?
2. It is concerning me that the property has been on the market as long as it has. The neighboring townhomes all value at around 120-130 (based on zooming in on Zillow). The area also has a ton of new construction. Are these  things I should be concerned about?

Thank you all in advance.