First potential deal

[John P.]

Hey Everyone,

I'm wondering about a duplex I'd like to buy. I've already made an offer of $450k on this place. This is my first deal.

Here is the listing:
http://www.redfin.com/CA/Los-Angeles/2222-Effie-St-90026/home/7057497

And here are the financials for it:
https://docs.google.com/spreadsheet/ccc?key=0AtZBnTCob-0wdGU3NXl2VE9RY0RiMnEzNnk3S2F4X1E&usp=sharing

I realize it's not the best deal in the world (good deals are very hard to find in Los Angeles), but I feel it would still be a pretty good first investment for me if it's still standing in 30 years. Appreciation in this particular area is expected to be and has been high. It's a very hip area (they're building a Whole Foods Market down the road). Regardless of the numbers, there are a few things I'm worried about.

I believe this house was bought at a foreclosure auction for $380k. It was flipped and put on the market for $499k. My realtor thinks the reason it's been on the market for 77 days is because the sellers were asking too much for it from the beginning. It was also previously in escrow, but the buyer dropped out due to nonperformance. Is the reason why there are any offers on this house really because it's been on the market for so long?

This property has an exposed and cracked sewer pipe. Something that I'm assuming can be negotiated to be fixed by the seller. The floor is also slightly slanted in the livingroom of the larger unit. It's enough of a slant to lose your balance if you're not paying attention. I'm not sure of the structural integrity of the retaining wall below that holds the soil level for the entire lot. For $1,000, I'm assuming that a plumber, structural engineer, and a building inspector can assess the property and tell me what the damage is, but is it even worth it? I'm afraid they're just going to tell me what I already suspect.

I fell like it's better to get in the game now that interest rates are creeping up and inventory is low rather than to keep waiting for the perfect opportunity to come along. What do you guys think?

Thanks for your help,
John