analyze this 3 plex buy and hold deal
B/B+ 3-plex in A neighborhood, small, upscale town in upstate New York, very stable housing market, 9/10 school district, 3-4% appreciation over last decade, 10-13% appreciation over last year. Rental demand fluctuates but is currently very high as people look to get out of NYC.
List price $425k, down payment 25% + closing costs $9,000 = total cash $115,250. Conventional mortgage 30 years @ 4%
Rents:
- 4Br/2Ba currently vacant, market rent $1900
- 1Br/1Ba currently $900, increase to $950
- Studio currently $600, increase to $650
- -----------------------------------------------
- $3500
Expenses:
- -$1522 payment/interest
- -$640 taxes
- -$150 insurance
- -$200 repairs/maintenance
- -$350 capex
- -$280 vacancy
- ----------------------------------------------
- -$3142
Cash flow
- $358 per month
My story:
- Goal is long-term (8-10+ years) buy and hold investor. I do not need cash flow, as I have adequate W-2 income. Will likely funnel cash flow back into mortgage paydown to accelerate equity build. Purchase price is likely current full market value. I want to take advantage of historically low interest rates locked at 30 years and get into real property with the possibility of inflation coming at some point.