Duplex Investment ! Help me decide

[Elton John]

Sorry for the long post, but here is the deal.

Property located in a very good neighborhood with great schools around, safe place for me and my wife to live in one unit and rent the other.

Listed price: $395k. Offer: $405k Loan Amount :$2100 monthly, Property taxes :$650, Insurance: $140, Vacancies $175, Capex+ Maintenance $525, Misc $100 for a total of $3,700 monthly expenses.

Both units currently rented at $1300 ( monthly, no lease), but tenants have been there 3-4 years so below market value. I estimate fair value rent around $1750, so $3,500 if both units rented. Once I get ownership, I will move both tenants out, live in one unit and rent the other one at $1,750. By me living there I can get expenses a bit lower, but still even if full expenses, it will cost me around $1,950 a month to live there.

Currently I am paying $1,600 in rent and lease expires in September. Even if I cant rent one unit immediately I can still cover expenses fully. If rates dip in the future and rent stays the same or slightly appreciates, this can be a cash flowing property if I decide to move out and buy another property.

Thoughts ?