Cap rate goal for Malden/Everett for first time buyer

[Faris Sheikh]

Hi all,

My name is Faris, I'm a marketing professional working at a 3D printing company in Somerville. I'm brand new to real estate investing, and plan on buying my first property so that I can stop paying rent. Goal is to get a multi-family unit, not have to own a car, and be a (max) 20 min uber ride away from Fenway or Cambridge. 

I plan on using FHA. I've been doing some back-of-the-envelope analysis's on properties every day. I *just* factored PMI into my model, and am realizing how much of an impact it's making on my yearly NOI.

I'm seeing that I probably need to aim for a cap rate of atleast 11% to be in the green YoY. Does this seem right? If I'm investing in Malden/Everett/Medford, what cap rate do you think I should be aiming for?

Would love any guidance and tips on this new journey. Excited to get to know you all.

[Nick Riccio]

@Faris Sheikh PMI is certainly a large expense, but it won't be forever. In my current househack, my mortgage (with PMI) is $5,000 and my rental income is $6,000. When I refinance to a conventional mortgage, I'll increase cashflow by an additional $725 by removing PMI. My point is, it's good to include PMI in your analysis, but understand if you're playing the long game - you'll eventually have that removed.