Is this a good deal - $5M income property

[David Besins]

Quick background: I have decided to start building a portfolio of rental properties (multi family) mostly in the Boston area for now. After acquiring a couple of 6 and 7 family - 600K properties, I realized it is quite a bit of work and decided my next purchase would be a larger project (easier to finance/manage etc).

My goal when I started looking for those was over 20% return (including principal payment) on a 20% down loan  while being very conservative with vacancy and budgeting repairs. I would probably exceed those targets.

Fastforward 3 month, we found a decent buy and here are the numbers:

List price: 6M (I know they will sell for 5.5)

Max purchase price: 5.25M

rent: $614K/year

expenses: 150K ( I am budgeting 160K)

For this deal I am trying to get to 10% DP / 80% bank (5year/25 year amortization / 4.875%) / 10% owner (matching bank terms). Using these numbers I get:

CoC: 65K (12.4%)

Return: 163K (31.1%)

The building is close to Boston and a solid brick building.

Do you guys think it is a good investment? - Please give your opinion