analyze this 3 plex buy and hold deal

[John B.]

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. 

[Will Fraser]

Hi @John B., good work on compiling these numbers and making it succinct.

The only one that jumps out to me that I would want to triple-check is the market rent for a 4/2.  Since it is vacant this is the one that I could see busting your numbers and taking a 3% ConC to a breakeven.  Especially in light of the current rent demand/value being high, I would want to ensure that this $1,900 monthly rent value is readily achievable and able to be counted on for the long haul (subject to normal vacancy rates of course).