@Michael Vu
On buy and hold deals like this, I'd look at it through the lens of all four means of wealth generation: cash flow, appreciation, debt pay down, tax savings. Only you can answer the later.
The cash flow number is so close to $0, that for the sake of argument let say it is $0 since some months it will dip negative and others will run into the black. If it nets out positive, that's a bonus. As time goes on, rent growth will outpace expenses, but you also don't cater to the tenant class that is the easiest on rentals.
100 yr old homes in C class neighborhoods in the rust belt are a dime a dozen, so unless there is a seismic shift supply and demographic trends, I wouldn't bank on appreciation above the inflation rate of 2%.
All we have left is debt pay down. As a benchmark, lets assume you hold the asset until the end the loan. Assuming no upfront repairs, you'd have an outflow of $24k and 30 yrs later get $217k ($120k grown at 2% for 30yrs) gives you a Compounded annual growth rate of around 8%. Taking out inflation gives you a real return of 6%.
Not bad, but not great. we know there are repairs to be done and that will make the the return go down. So the question is, who will pay for what repairs and how much will they cost. This is where the skill comes into play being a REI. It looks like anything over $10k in repairs out of your pocket cuts returns in half.
Now this isn't meant to me an accurate model, just a back of the napkin SWAG to let you ask the question: Is 6% worth the risk? If yes, what level of repairs will make this deal not worth it?
