Am I calculating cash on cash incorrectly?

[Dan Falco]

Hi all,

Either I’m doing something wrong or this property doesn’t cash flow very well. To be clear, the deal isn’t done quite yet. This would be my first ever home (duplex) purchase. I’ll be living in one unit and renting out the other. I’ve been calculating cash on cash based on renting out both units. Here are some details:

Price: $275k

Down payment: 15%

Down payment and closing costs: $54k

Upgrades before renting: $3k

Gross monthly income: $2,450

Mortgage payment: $1485

Vacancy: $240

Property Management: $240 (I’ll be self-managing but was told to still account for it)

Maintenance: $215

Capex: $215

Trash/Sewer: $110

Water: $100

Monthly cash flow: -$155

I'd then calculate out CoC, but clearly it won't look good with these numbers. Am I doing something wrong? Or is this as bad as it looks… Appreciate your input!