Questions about my first investment property

[Terry Hegarty]

Hey everyone,

So for the past 2 months my brother and I have been looking for 2-4 unit property in Chicago. Our plan is to live in one unit and rent out the other units. We found a place that is listed for $250,000. It's move-in ready. There are 2 legal units and rentable basement. There is a two bedroom and a one bedroom and a basement unit with 2 bedrooms but no kitchen. Overall, my realtor concluded we could get $2400/month in rent if fully rented out (In reality it would be less since my brother and I would be living in one of the units). Basically this is her analysis and I'm wondering what you think...

List Price: $250,000

25% Down Payment: 62,500

Mortgage Amount: $187,500

Gross Monthly Rent: $2400

Gross Yearly Rent: $28,800

Expenses

Taxes: $5058

Insurance: $1400

Water: $1300

Gas and Electric is separate

Vacancy (5%): $1440

Total Expenses: $9198

Net operating Income: $19,602

Mortgage Amount: $187,500

Monthly Payment (4.5 interest rate, 30 year fix): $950.03

Yearly Mortgage payment: $11,400.36

NOI/ Yearly Mortgage Debt: 1.72

Two things I've never heard of NOI/ Yearly Mortgage Debt. Also she said she did not plug in a cap rate or GRM because on 2 units these numbers are not the best to use for comparing 2 unit properties one to another, as they can very so widely from property to property. I thought cap rate and GRM were important to evaluating 2-4 unit properties. Any thoughts would be appreciated.