This is how I calculate my return on investment. Am I acting rational?
I'm studying the possibility of buying a multifamily with 7 units, all rents near market. Well maintained building. Sales price $350,000. All apartments occupied, 5 with tenants present &gt; 3 years. Rent total $4,900/month. (My other rentals in the same city are rarely vacant more than a day or two.)

My mortgage payment (P+I)+ insurance+ water/sewer,+maintenance= total monthly expenses=$3,000/month.

NOI= $4,900-$3,000=$1,900/month=$22,800/year

My bank requires 15% down=$52,500.

Annual rate of return on down payment=$22,800/$52,500=43%. This calculation carries the greatest influence with me.

Over the years I've considered, bought and held rental properties using the analysis above to guide my purchase decisions. But I've never purchased a property for more than $185,000. Buying something at $350,000 is giving me cold feet. What do my colleagues here think? Thank you.
[{"id": "iha3kb1", "text": "What are you budgeting for maintenance specifically?", "replies": [], "depth": 1}, {"id": "iha3ufj", "text": "Assuming no major cap ex this is a very good deal.", "replies": [], "depth": 1}, {"id": "iha43ws", "text": "A $300,000 loan at 5.5% and 20yr Amm would be $2k per month in P&amp;I. Leaving only $1,000 per month ($1700 per unit per year ) in additional costs. For multifamily this is way too low. Even in Midwest \"cheap\" cities you would budget $3k minimum in operating expenses. Insurance and property tax will be close to $700 per unit per year alone.", "replies": [{"id": "iha4dal", "text": "That being said $700 per unit in rent for $50k per door is really good pricing. You know your area and know your operations. I think your return year one will be closer to the high teen rate 18-20%, so still a great yeild.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iha7jpo", "text": " No property management budget?", "replies": [], "depth": 1}, {"id": "ihazhe2", "text": "Debt service does not decrease NOI.\n\nNOI is what your cash flow would be without debt (or cap ex).", "replies": [], "depth": 1}, {"id": "ihbecs6", "text": "What are you calculating for vacancy/ rent collection?", "replies": [], "depth": 1}, {"id": "ihbpmlt", "text": "Missing closing costs in your down payment. Missing property management budget. Tax budget. CAPEX reserve. Vacancy reserve. \n\nThe 15% down payment is great. Hard to find banks that will do that. That is the ticket to a strong cash on cash, which I think the property can achieve. \n\nI\u2019d re run some more conservative numbers then pull the trigger.", "replies": [], "depth": 1}, {"id": "ihbu0bt", "text": "I threw some numbers in my analyzer. I think you\u2019re a little thin on the expenses, but even with more conservative numbers it still looks good. Should get a solid Cash on cash in the mid teens.", "replies": [], "depth": 1}, {"id": "ihbumoy", "text": "I\u2019m seeing a lot of missing operational expenses. Your cash flow looks higher than what will realistically happen.", "replies": [], "depth": 1}, {"id": "ihc2t8t", "text": "Yeah we assume 35% for operating expenses in my market but every locale and every asset is unique. $58,800 annual revenue times .65 = $38,220 NOI - divided into $300,000 cost is a nice  12.7% cap rate so it\u2019s likely underestimating operating expenses or it\u2019s a higher risk area. Either way it does look like a good deal! Normally I see 6-7% cap rates for residential properties", "replies": [], "depth": 1}, {"id": "ihed3ic", "text": "With my math this deal is making 100 a month after debt service about 2-3 percent cash on cash", "replies": [], "depth": 1}, {"id": "ihmurcp", "text": "7 units for $350,000 rented for $58,000 a year? Where do you find these great returns? What\u2019s the catch?", "replies": [{"id": "ihn3mfs", "text": "It's listed $385. My top offer was $350. Seller declined.\n\nhttps://commercial.century21.com/listing/2785-north-main-hazard-ky-41701-REN020927963", "replies": [{"id": "ihnbe2b", "text": "If the property is renting for $60,000 (probably netting $40,000) why would he sell for $385,000? It\u2019s a great income you can\u2019t find anywhere in todays economical climate.", "replies": [{"id": "ihnke5t", "text": "I'm done.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]