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RE Deal Analysis in NYC

Considering a 3 unit deal in NYC. As most of you know, the market has some of the lowest cap rates in the US. But given the size of deal and rents, it worth while at least in my opinion. Can you guys let me know your thoughts?

Here are some metrics:

  • Purchase Price: $1.125M
  • Down Payment: ~$400K (35% Down)
  • 4.75% Cap Rate (after vacancies, capex etc.)
  • 1% Annual Rent Increase
  • 2% Annual Property Price Appreciation
  • 30 Year Fixed @ 3.5%
  • 5% Closing Costs at Purchase, 11% Upon Sale

Based on my calculations, I have a $1k / month CoC and 7% levered IRR (need to hold for 10 years)

Pros:

  • Large enough deal to supplement my current income
  • Higher rate of return than HYSA, index funds (when including tax benefits)
  • Conservative assumptions
  • Family will help with PM

Cons:

  • Will likely have to take on management responsibilities even with family help
  • ~30 min away from where I live
  • Covid uncertainty
submitted by /u/harv5889
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/jk13ut/re_deal_analysis_in_nyc/
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