too much risk for first deal?

Hi all, just wondering if I could get some feedback on this deal.

Property is located in an excellent growing regional area with a population of 90,000

Here is the deal as it is now:
11 Second Solution:
Rent = 330
Occupancy rate ‘2 Weeks’ = 96.15 Percent
Solution = $158645.00
Asking price = $240000

Closing costs:
Deposit 0 Percent = $0.00
Legal fees = $800
Stamp duty = $6890.00
Mortgage app fees = $475
Mortgage insurance = $0
Valuation fees = $0
Other borrowing costs = $400
Clean up costs = $0
Inspection costs = $300
Other costs = $12000
Total closing costs = $20865.00

Mortgage details:
Loan Principle and Interest = $240000.00
Interest rate = .02 Percent
Term = 20 Years
Weekly mortgage repayments = $231.23
Total repayments for life of loan = $240482.40

Annual costs:
Management fees 7 Percent = $1154.97
Letting and advertising = $0
Body corp fees = $0
Rates = $3060
Utility rates and fees = $0
Insurance = $350
Miscalanious costs = $0
Land tax = $300
Maintenance 5 Percent = $824.98
Other ownership costs = $0
Total annual costs = $5689.95

Summary:
Total annual rent = $16499.60
Total annual mortgage = $12024.12
Total annual costs = $5689.95
Total annual cashflow = $-1214.47
Total funded costs = $20865.00
Risk free return = $834.60 Bank interest rate of 4 Percent.
Annual Cash On Cash Return = -5.82 Percent
Cashflow Positive Weekly = $-23.36

Not that flash……………..
But my plan is to buy block of flats, (not strat titled by the way) improve with new reverse cycle a/c and paint job, getting extra $15 rent per week on all units, they are currently @ 3 x 2br @ $85pw
and 1 x 1br @75 pw which is very cheap
new figures = with negotiating price to 230,000
11 Second Solution:
Rent = 390
Occupancy rate ‘2 Weeks’ = 96.15 Percent
Solution = $187495.00
Asking price = $230000

Closing costs:
Deposit 0 Percent = $0.00
Legal fees = $800
Stamp duty = $6890.00
Mortgage app fees = $475
Mortgage insurance = $0
Valuation fees = $0
Other borrowing costs = $400
Clean up costs = $0
Inspection costs = $300
Other costs = $11500
Total closing costs = $20365.00
Mortgage details:
Loan Principle and Interest = $230000.00
Interest rate = .02 Percent
Term = 20 Years
Weekly mortgage repayments = $221.60
Total repayments for life of loan = $230462.40

Annual costs:
Management fees 7 Percent = $1365.00
Letting and advertising = $0
Body corp fees = $0
Rates = $3060
Utility rates and fees = $0
Insurance = $350
Miscalanious costs = $0
Land tax = $300
Maintenance 5 Percent = $975.00
Other ownership costs = $0
Total annual costs = $6050.00

Summary:
Total annual rent = $19500.00
Total annual mortgage = $11523.12
Total annual costs = $6050.00
Total annual cashflow = $1926.88
Total funded costs = $20365.00
Risk free return = $814.60 Bank interest rate of 4 Percent.
Annual Cash On Cash Return = 9.46 Percent
Cashflow Positive Weekly = $37.06

Now do you think this is a big risk for our first property?
Should we just go for it?
PS. These figures are based on using the interest free loan.
Thanks for everyone’s feedback, I really appreciate it. [biggrin]

collie