Help Analyze My First Deal

[Andrew C.]

First time here, looking at a medical condo office in Manhattan, NY.

Asking Price: $965,000

Area = 872 sq ft

Did some research and found that the average rental price for medical offices in the area is ~$87/sq ft/ yr, this comes out to about ~$70k a year. Using a conservative estimate I think I can get $5000/month ($60k/year)

Rental Income = $5000/month.

Vacancy Rate = 5% ($250/month)

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Gross Monthly Operating Income = $4750

Common Charges = $570/month

RE Tax = $849/month

Misc Expenses = $300/month (I came up with this number for unforeseen expenses)

Accounting and Legal = $50/month

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Monthly Operating Expenses = $1769/month

If I offer $600,000 all cash purchase with no mortgage, that puts me at a 5.96% cap rate. Assume 5% closing costs my Cash on Cash return is 5.68%.

Does this seem like a good deal? $600,000 offer is way below their asking but the 5.68% still seems like a low return. Seems like I can get a better return in the stock market just by buying high dividend paying stocks.

Any feedback would be greatly appreciated.

Thanks.