Should I go for this deal

[Kyle Johnson]

I want the community to check my analysis on a property I think I may put in an offer.

It's a 4 plex in Paradise Valley Village neighborhood in Phoenix Arizona. It has 3 two bedrooms and 1 three bedroom in an apartment complex. Asking price is 445k, rents are at 31.5k gross now or about 2,625 which I strongly believe is below market rent. Please correct me if I'm wrong. HOA fee is $2,400 a year. Water, sewer, and trash is $4,400 a year and property taxes will be around $1400 I believe. I'm not sure how much insurance is but I'll put in $1,500 right now for the calculations.

In addition I expect a  10% management cost and a 15% maintenance cost. These may be high but I like to over estimate to be safe. I will use a 25% down payment and can expect a 4% or less interest rate amortized over 30 years. Using these conservative numbers I get a negative cash on cash return of -5.79%. However that's not my question.

I plan to bring up rent the rent which I need double checked. Rent o meter and zillow states that a 2 bedroom will go for 1100-1300 and a 3 bedroom can go up to 1300-1500. Again I plan to use conservative estimates so my future rent could increase up to $4,600. Is that a fair estimate? 

In addition I was planning on installing sub-meters for water so the tenants will pay for their water, possibly cutting my utility bill to possibly half of what it is to $2,200. Using these new estimates and maybe a 3.25% interest rate for a mortgage, because I have good credit, my new cash on cash return could be 12.88%. This seems too good to be true and I just need help making sure that the new rents would be appropriate. 

On another note are people still increasing rent on their properties despite the pandemic and economic recession? I don't believe this is possible with my predictions. Because of the current events, I have used more conservative increases in rent. Any feedback would be appreciated.

I do want to say that the seller brought down the price to 445k but wants the earnest money to be 10k and without an appraisal contingency. This is my first time investing in a multifamily unit and recognize the possible risks and rewards but would like to get people's feedback. Thank you for your help and time.