Apartment Complex Opportunity

[Matt Fabian]

My investment account is currently worth $380k.  Would you cash it in in order to make a 25% down payment on a 16 unit apartment complex?  I would have to pay about 35k in capital gains.  

Here are the numbers:  

$1.4 million purchase price

25% down, $350k

$10k in closing costs

$1,050,000 loan amount @ 5.25% interest 15 years

$8,441 monthly mortgage payment - $101,292 yearly

$7500 yearly insurance

$20,000 yearly property tax

$10,000 maintenance?

Total yearly cost - $138,742

Average rent currently $850 per unit, 

Year revenue = $163,200

163,200 - 138,742 = $24,458 profit.  Feels like not a great number.  

Each unit is 2 bed, 1.5 bath,  4 buildings, 4 units per building.  Built in the 1990s.  Roof is 8 years old.  No issue keeping it occupied.  Minor improvements needed. I believe rent could be raised $50-$100.  That seems to be were the opportunity lies, in increased rent.  $50 increase in rent = 10k a year for all units.

Thoughts?