Possible First Deal!!! Let me know what you think.

[Victor B.]

Hey BP,

I wanted to get feedback on my first possible deal. Please let me know what you guys think.

The owner of the home passed and now the son is selling the property. The unit in which the owner lived in is vacant but the second unit has a long term tenant that is willing to pay $400/month to stay in that unit. He is currently on a month to month verbal agreement.

Purchase Price: $40,000

Expenses on repairs & cosmetics: 3K to 4K (Estimate by Agent)
Financing Assumptions:
Down Payment: $8,000
Apprx. mortgage Payment: $168 @30yr Term
Rents for each unit: These are fairly conservative numbers.
1st Story- $600 (Vacant)
2nd Story- $400 ($275 now)
Property tax, Insurance, and Water : $350/month

Management Fee: $100/month (10% gross rent)
Vacancy: 8.3% estimated
Individually metered? Yes

Big Ticket Items: Roof, Windows, and Furnace were replaced in the late 90’s. Electrical Fuses were updated to breakers.
Area: Borders the end of rough neighborhood. According to Agent neighborhood continues to improve.

Concerns:

House was built early 1900’s

Exterior of house has an asphalt/asbestos mix

Lead base paint disclosure

Please let me know if I missed anything. Any feedback or comments would be greatly appreciated.

Thank You.