How Many Issues is TOO Much to Make a Deal Not a Deal?

[Michael Vu]

Hate to be at this point again in the due diligence, but here I am. Ready to learn.

I'm under contract on a duplex (first deal) and after having inspections, I don't know if this deal is worth it anymore. I'd appreciate some input from the BiggerPocket community! 

Here is my deal analysis:

PURCHASE
Purchase Price	$120,000.00
Down Payment	$24,000.00	20.00%
Closing Costs	$3,240.00
Mortgage	$437.00
INCOME
Monthly Rent	$1,200.00
EXPENSES
Property Tax	$267.00
Home Insurance	$85.00
Vacancy	$50.00	4.17%
Maintenance & Repairs	$60.00	5.00%
CapEx	$96.00	8.00%
Water & Sewer	$80.00
Gas	$0.00
Electricity	$0.00
Total Expenses	$638.00
DEAL ANALYSIS
Net Operating Income	$562.00
Monthly Cash Flow	$125.00
Cap Rate	5.62%
Cash on Cash Return	5.51%

So when I first looked at this deal, I saw there was long term tenants (so lower vacancy), the living spaces of the property were actually very nice for a MFH, and the price was attractive. It came out to around $125 / month cash flow, not GREAT, but for a first property it's a base hit and gets me in the game.

HOWEVER, here are the main issues that came up from the inspection that really concern me:

• Horizontal cracks in the poured concrete basement foundation on the back and left side of the house with what looks like attempts to patch it with stucco in the past
• Knob and Tube wiring throughout the entire house (concerned about getting insurance)
• Galvanized piping for majority of water supply lines (low water pressure throughout house)
• Leaking roof from chimney (need to install cricket) and fix upstairs unit walls
• One of the furnace flues is completely deteriorated and needs replaced, currently releasing some levels of carbon monoxide into basement
• One of the water heaters is from 1992
• Some water intrusion damage in main electrical panel and one of the breaker panel is a Pushmatic style

These are what I conclude as the big ticket items. Are these TOO many serious issues to still make this a good deal? It seems that this one has hit the mark on all the main issues (foundation/electrical/plumbing/roof). I appreciate any help/advice. I really want to jump in and get started in 2020. But I wonder if I'm jumping off a cliff here.