However, if vacancies do occur you are at least covered for one month.5% is okay for Maintenance/Repairs.1% for CapEx is crazy!  

(Utilities were rounded up on my part)The asking price is $115K (in a very small town, but the biggest town within a 50 mile radius).Monthly Rent                                          280010% Vacancy                                        -    280Gross Monthly Operating Income     252010% Property Management                   28010% Repairs Maintenance                      28010% CapEx Reserves                                280Property Taxes                                          280Property Insurance                                   200Heat                                                             270Electricity                                                    225Water                                                             75Monthly Operating Expenses              1890   Total Annual Operating Income           30240 Total Annual Operating Expenses     - 22680Annual Net Operating Income             7560Purchase Price                                    115000Cap Rate                                                6.57%25% Down Payment on Loan             28750Loan Amount                                        86250Closing Costs                                             300Length of Mortgage                             20 yrsAnnual Interest Rate                              5.0%Total Annual Debt Service                  6831Annual Cash Flow                                    729Monthly Cash Flow                                  $60Cash on Cash ROI                                   2.3%When I first saw a "6 unit apartment for only $115K" I thought it was a gold mine.

The reasons may not matter, but basically there have been issues that required several repairs.

cause by my calculations that's 16% on the $32k I came out of pocket. plus the repair costs... another $10k (let's not count that for now) 

There isn't much room for error here.Here is a link to the Duplex, its a little distressed but I think I could make the repairs and gain the sweat equity that can be found there.  

Here are my thoughts....1) Find a rock solid property manager that has their own crew for repairs and maintenance. 

As I'm an out of state investor (I live in CA, where investing is rough), I'm looking for fairly minimal repair work to start off with, and would even consider turnkey properties for now, until I can build up a stronger network in the area.  

Hi there! I have a property that we may buy "subject to" existing mortgage. However I need about 25k to pay the arrears, & fix it up. We are planning to do a live in flip. I am trying to find a private money lende...

You would be shocked at how some high income earners live and treat rental units that arent theirs, most renters are fine but many are entitled and may take you to court or stiff you on a repair bill rather than assume liability.

(a) “Common Area Operating Expenses” are defined, for purposes of this Lease, as all costs incurred by Lessor relating to the ownership and operation of the Project, including, but not limited to, the following:(i) The operation, repair and maintenance, in neat, clean, good order and condition of the following:(aa) The Common Areas and Common Area improvements, including parking areas, loading and unloading areas, trash areas, roadways, parkways, walkways, driveways, landscaped areas, bumpers, irrigation systems, Common Area lighting facilities, fences and gates, elevators, roofs, and roof drainage systems.