Rental property in west of chicago

[Jun Zao]

So I am looking at a 7-unit building in North Lawndale of Chicago.

Asking price is 400K

NOI is 54K. It already includes property management fees.

So if I put down 25% and assuming closing cost is 5%, I would have invested 120K.

According to RedFin, I'll roughly pay $1400 a month for principal and interest.

So 1400 X 12 = 16800.

So my annual profit is 54,000 - 16800 = 37200

And my rate of return is 37,200 / 120,000 = 31%

Does this sound about right?

Given that this is a leveraged position and the fact that these units are highly il-liquid (making them less attractive investments), 31% doesn't sound all that outrageous?