Investment memorandum
Bank Street Two-Bedroom
West Village, Manhattan · Pre-war co-operative, 1925 · $2,150,000
Recommendation
Pass at this price.
1.8% a year over 10 years (-2.8% after tax), with $5,939 a month to carry from year one. As a home: renting an equivalent home is about $7,008 a month cheaper; owning wins only if values grow faster than 3.2% a year.
Confidence: Moderate. Base case: 6.35% rate, 25% deposit, 10-year hold.
- Net yield
- 2.3%
- Cash on cash
- -12.3%
- IRR
- 1.8%
- IRR after tax
- -2.8%
- Total return
- 29%
- Cash in
- $581k
The property
A corner two-bedroom on a tree-lined block, with working fireplaces and a planted terrace. Maintenance includes property taxes.
Provenance
An Emery Roth design from 1925. Board requires 25% down and two years of maintenance in post-closing liquidity; sublets allowed after two years of residence.
Risks we weighed
Rates a point higher, a month more vacancy and values two points lower take the ten-year IRR to -7.9%. Flood exposure is minimal.
This memo is live. Its figures update as rates and comparables do. Model your own properties the same way.
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