Need help choosing between two deals.

[Waylen Herdman]

These two deals are located in Clarksville, TN and I'm having trouble deciding which deal I should opt for (If my offer is accepted of course).

FIRST DEAL:  Duplex (2/1 each side)

Asking price - $77,500 in a D or C neighborhood (Offered 74k and they pay 1/2 closing costs).

Will probably need 5k - 7k in rehab.

ARV Probably $80k - $85k.

I was approved for a 3% conventional loan. At first I was planning on house-hacking with an FHA loan but now I'm thinking I'll just rent it out as I have better job opportunities where I currently live (Franklin, TN).

One side has been renovated while the other has not and I have yet to see it. The tenant is being evicted and supposed to be out this month (I have three contingencies: Seeing the other unit, tenant is vacated and inspection).

I believe once the other side is renovated I can bring in ~$600/side, so ~$1200.

I received a cost estimation with my pre approval letter of 85k which has my PITI as ~$650 so I'll use that. I'll also use 50% of PITI for operating costs (~$325).

$1,200 Rent - $975 = $225 Cash flow.

Bottom Line: The cash flow is definitely superior in this deal but my biggest worry is definitely the class of tenants this property would attract. I also have little opportunity to force appreciation unlike my second deal.

SECOND DEAL: SFH (2/1)

Asking price - $60,000 in a B neighborhood (Touring the property tomorrow)

Will probably need 7k - 12K in rehab.

ARV probably around 85k - 100k.

Since I was approved for a conventional loan I started looking at distressed SFH and this deal popped up. It's only been on the MLS for a day.

The property is distressed but from the photos, honestly just looks dirty and unkempt. I'll have a better gauge tomorrow once I step foot in the house. The house is located in a better area of Clarksville and when I look at Zillow, there are no houses under 100k within a mile vicinity.  Houses with similar Sq footage are 100k - 130k (but most have 3 beds). It also has a 20x30 detached garage/workshop which seems like a great sell to a future tenant. 

I believe I can bring in $750 - $900/month.

My PITI will probably hover around ~$550 (This may be a little high) and adding 50% as operating costs we come to a total of: $825

$900 Rent - $825 = $75 cash flow.

Bottom Line: I can force considerable more appreciation in this house and the refinance and take all my money out and repeat. I also think I can have a much better tenant in this property as opposed to the first deal.

They both seem good but for different reasons. I would love to get Bigger Pockets take on these deals and if I should pull the trigger on one or wait for a better deal to pop up. I probably missed quite a bit of information so if I did, just let me know and I can answer as best I can.