Peter -- I think you might be making a mistake in calculating your numbers for cash flow (which is ultimately the important number here). You are executing a rental on your current property, and wish to take liquid cash and purchase another property. All well and good.
You are then saying for property A, my PITI is 1930, my expenses (vacancy/maintenance) is 350, so total expenses is 2280. You are renting for 2700. Your cash flow is 420 per month. However, what about capital expenditures on property 1? Does the furnace, roof, flooring, appliances, etc, in need of replacement soon? What happens if you're hit with a 10k bill for something like that in the near future? Would you have the reserves on hand to take care of that? Some landlords build that into their expenses and divert money per month for that, which eats into cash flow, but covers you when the bill actually comes. What about other expenses, e.g. utilities the landlord has to pay?
Assuming you've covered those in your expenses, if you truly made $420 per month cash flow and the property is a SFH, I'd say its a good deal. What did you purchase the home for? You can find your cap rate by dividing your yearly income by the purchase price. 10% cap rate seems to be standard for most folks, but ultimately not the only qualifying number.
Based on what I am seeing you have no intention on renting out property B, it is a home for you to live in, correct? So you're trading up so to speak, on a more expensive property, utilizing liquid cash for a new home?
Ultimately, could you do better by staying in property A, buying a multifamily property using liquid cash, and making far better cash flow per month? For instance, if you found a multifamily property with the same PITI, add in your expenses and capex, to the tune of say, 3000 per month...and then rent it out for 4000 per month? Now your cash flow is $1000 per month, 12,000 per year(versus $420 on property A), you've kept the same monthly payment that you have now on your current property (cash that stays in your pocket), and you can far more easily calculate COCR, Cash Flow, Cap Rate, ROI, etc, on a property that's working for you far better than renting out your existing property.
By the way, I don't talk about this like I don't know where I am coming from -- I rented out my first home (property A) for meager cash flow while my wife and I purchased our "forever home" which has a higher monthly cost via PITI. Long story short, I rented out property A for 3 years and just sold it for a bit of profit...to do exactly what I told you to do. I'm investing in a cheaper multi-family property that should net around $500 per month cash flow, my cash on cash return is 10.5%, and my cap rate is 21%.
While I think people invest for many reasons, one of mine is the right numbers and cash flow. Property A did not have the right numbers and cash flow, long term, at least for me.
