Multi-Family Investment Purchase Investment Approach

[Joe L.]

Hi all - 

I am a new real estate investor looking to purchase my 1st investment property. I recently came across the following listing (https://www.trulia.com/p/nj/mo...) and wanted to get your initial thoughts / mindset on how you would potentially analyze this property as a potential investment.

From a high level perspective, these are the variable factors that I considered when crunching the numbers:

- Purchase Price: $500K

- 20% down / 30 year mortgage

~6% interest rate (conservative rate)

- ~$9,500 / year in property taxes 

- agent mentioned you could potentially collect a total of $4K / month in rent (one unit is currently being rented as month to month while the other is vacant), but let's use ~$3,800 to be conservative

- so ballpark estimate of my monthly mortgage will be ~$3,500 and if I'm conservatively estimating a total of ~$3,800 a month in rental income leaving me with a net ~$300 / month

- therefore my CAC for the year ($300 / month x 12 = $3,600 / initial cash outlay of ~$112K ($100K down + ~$12K in closing costs) = 2.5%

I know there are other things I didn't consider such as vacancy rate, maintenance, and whether I would use a property manager which would all drive the return even lower but a 2.5% return doesn't seem like a good investment.

Am I thinking about this the right way?

Regards,

Newbie investor