Posted by Jimbob on June 16, 1999 at 17:44:35:
From a monthly cash flow point of view there is no deal here, even if you put 20% cash down, by the time you received the rents and paid the PITI, and utilities, you wouild be left with little or nothing each month. That does not include periodic repairs or tenant turnover other maintenance. On the other hand if the property could appraise for $75,000 you could realize $20,000 in equity, not a bad exchange for a break even or small monthly negative cash flow.
One thing that bothers me is you mentioned this is a single family home or a property in a predominantly single family neighborhood rented out as a duplex, many people attempt to skirt local zoning codes by doing this and calling it a “non-conforming” duplex. In a lot of cities this is an illegal practice and the landlord can be fined. You should definitely check with the local county zoning codes and find out what the story is there. Wouldn’t it be something if the reason the current owner wants to sell is because the county zoning commissioner is about to hit him with a big fine for zoning violations?