Feedback on First Deal

[M Ness]

After a lot of researching, reading, and planning, I'm getting closer to purchasing my first property. The goal is to buy a cashflow rental condo unit. I settled on a condo unit for a few reasons: in my target town, an affluent college town, I cannot afford a house that would be a nice enough neighborhood to attract the type of tenant I want. Also, because this is my first property, having common area/exterior/roof maintenance is attractive.

I haven't made an offer on an exact unit yet, and my next step is actually to hopefully get pre-qualified for a mortgage for the property. But, before meeting with realtors and going down this path, I wanted to run the numbers past the experts here. I've narrowed down the neighborhoods/unit types I'm looking at, and this is a theoretical but likely scenario:

Property: 2 bedroom, 2 bathroom condo in multi-unit building.
Price: $75,000
Equity/Down payment: $20,000
LTV: 73.33%

Monthly Rent Income: $1,150

Yearly Gross Operating Income (accounting for vacancy loss): $13,000
Taxes and Insurance (yearly): $1,500
Yearly Condo Fees: $3,600
Misc Yearly Maintenance: $600

Yearly NOI: $7,300
Yearly Debt Service: $4,500

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YEARLY BEFORE TAX CASH FLOW: $2,500
CAP RATE: 9.73%
ANNUALIZED CASH-ON-CASH RETURN: 12.5%

What do you think? If the numbers are right, is this a good deal? It seems good to me, but expert advice is always greatly appreciated!

Finally, this deal would require a $55,000 mortgage. Do you think a local bank or mortgage broker would be willing to lend? Is there a difference between an investment mortgage and a non-owner occupied mortgage, or are they the same thing?

Thank you all for the help. Much, much, appreciated.

[Uwe S.]

Only one example of the vacancy rate, if you have 12 months assumed as 100% and one month vacancy you have 8.33%, two months vacancy result to 16.66%, so dont plan with only 6%!

-Uwe