1957 2 bed 1 bath rental property

[Josh Randall]

I'd like to get some feedback on this potential first rental my brother and I are considering purchasing.

Here's the info:

It's 2 bedroom 1 bath SFR. It's block construction. Roof was replaced the end of last year. All electrical (200amp service) and plumbing was replaced less than 10 years ago. Floors are solid oak except tile in kitchen and bathroom. All in good shape. Inside just painted. Outside is being painted tomorrow. It doesn't have central A/C or heat and a new wall unit would half to be purchased and installed into an existing opening.

The only work that needs to be done is cleaning, perhaps some light landscaping, and the purchase and install of the A/C unit mentioned above. My brother and I would handle all of that and I estimate a max cost of $1000.

Selling price $27,000

We plan to finance at 5.45% for 15 years with 20% down. Closing costs $350. Those are the requirements of the lender, BB&T. Which by the way is the only lender I could find for such a small loan amount.

So with 20% down we will finance $21,600.
Insurance = $1,244 annually.
Taxes = $540 in 2012. Although, I found out today the assessed value for 2012 was $22,360 and for 2013 has dropped to $13,350 so I would think the taxes will be less this year.

Plugging all that into BP's mortgage calculator I'm coming up with a monthly payment of $324.58.

I've confirmed the rent should be $650. I figured this from my own research of other properties in the area, the current owner who has rented the property for 12 years, and a friend who owns two SFR's on the same street.

So that leaves me with $325.42. If I apply the 50% rule that leaves me with a cash flow of $150 per month.

What are your thoughts? Let me know if I missed anything.