@Cole Black
As you said, not knowing the area OR any of the expenses on the property this will be practically impossible to tell you whether or not this is a good deal. So just going off of the very limited information, lets take a look at possibilities.
1) You will need a down payment. It's possible to get owner financing but even in that case you will still need a down payment as well as exceptional credit history and a decent net worth. Often times an owner financed deal requires better stats than a bank would require as the owner has a lot more risk to consider than a bank does. That being said, account for 10%-20% down. If you pay asking that $62k down. Which gives you a $248k note, 30yr amort @ 5.5% gives you an annual debt service of $16,174.
2) Your GPI (Gross potential income) is currently $31,680. First you need to figure out WHY there is such a drastic difference in rents. This will also help you determine if you can raise rents to increase your cash flow. You also need to determine how much improvements will need to be done on the property in order to get the rents up.
3) Assuming your expenses are 40% of GPI ($12,672) - debt service of $16,174 you are left with $2,834 of cash flow annually or $236.17 per month OR $59.04 per month per unit. We can stop right there as this is a **** deal.
Assuming the world is full of rainbows and unicorns and everything else is perfect, you are out of pocket $62k for the down payment and your annual net income is only $2,834 which means your CoC or Cash on Cash return is only 5%. To make this worth anything you would need at least a 15% return and given the numbers you've supplied means that you couldn't pay more than $95k for the property. Or you would need to increase the annual net income by 215% which would give you an annual net of $8,927 after debt service which would result in a 14% CoC.
Wouldn't be worth my time.
