deal analysis

[Jonathan G.]

So here is a 6 units building, 1/1, very strong rental area in Sunnyvale, CA. heart of the Silicon Valley. Low cap rate but let me know if this make any sense. Deal is offered at $888k. Market comps shows that similar deals are probably selling around $850k.
25% down, 6.25% interest. NOI looks like this:

Rental income $90,000
vacancy 5% (4,500)
Net Income $85,500

Property Tax $(9,912)
Management fees (5,130)
Insurance - Property (2,000)
Maintenance (4,200)
Gas & Electric (1,503)
Water (1,500)
Garbage  (1,500)
Landscaping (900)
Total OPEX (26,645)

Operating income $58,855

mortgage payments (46,307)

Net Income $12,548

Cash on cash is around 5%. The strategy is to buy and hold for at least 5-7 years and hope rent will go up at some point. Until then we can make our 5% c-o-c.

I know some of you will not even look at this ROI but for us, living in the bay area in CA that is the reality. I prefer to stay for now in my farm area where I'm familiar and can manage my deals by my self.

Please provide feedback. Does this deal worth pursuing?