a multifamily investment case analysis

[Zhong Zhang]

Can you help me evaluate an investment case? I mainly want to ask if these assumptions are reasonable and if there's anything I haven't considered:

(1) multifamily units in NJ close to New York City, ~$1,000,000, 20% down payment, 

(2) Using the following assumptions: 4% appreciation rate, 6.5% interest rate and 5.0% refinance after 5 years, $10,000 yearly maintenance fee

(3) ~$6,000 monthly rental and assume 3% increase yearly with 5% vacancy rate

(4) Based on the above, the calculated IRR if selling at the 10th year is ~19% (considering tax benefits) and ~17% (without tax benefits). The tax benefits refer to the tax deductions from mortgage interest and property tax.

The returns mainly rely on appreciation, and the cash flow only improves in the last few years, also depending on securing the 5% refinance rate.

I've learned a lot from this forum, but as I start to operate on my own, I'm still not completely confident. I'm not expecting a yes or no answer - I would be very grateful if you could comment on the analysis above. Thank you very much!