Rental buy and hold in Topeka, KS - >10 CAP

[Mikhail Petrenko]

The property is 1080 SF 3 BD 1 BA , built-in 2002, the appraisal 2020 is $73000. 

Located right 2 blocks south of Washburn University. 

I heard it is a rough neighborhood. 

The condition of the house is livable, maybe, needs some cosmetic repairs (2-5k maximum).

The condition is close to https://www.zillow.com/homedetails/1210-SW-Lincoln-St-Topeka-KS-66604/77506157_zpid/? (this comp is within 1.2-mile distance)

I have an off-market offer to buy it for $40000.

Market rent is $600-750 (different opinions from different local realtors)

Conservative:

- 7% occupancy

- 7% repairs (maintenance and capital improvement)

- 6% management fee

- $600 monthly rent

- 0 appreciation

- $1300 annual tax

- $300 insurance 

CAP rate is 10%.

Is it worth it?