A few examples of MFR investment property numbers going sour lately

[Archipelago]

I went to look at 7 units last week. 4-plex and 3-plex right next to each other. These are two underperforming properties with significant upside which I would normally jump on.

4-plex:
(3) 1/1 units
(1) 2/1 unit
Listed price: $310k
25% downpayment = $77,500 @ 7% 30 year fixed
Closing costs: $5,000
Improvements: $35,000
ARV: Mayyyybe $380k on a good day?

Current monthly rent roll: $2025 (1 unit vacant)

P&I: $1547
Taxes: $506
Insurance: $230
Management: $202
2.3% vacancy: $47
CapEx: $336
Utilities: $50
Lawn and snow: $100
Repairs: $200
Expenses total: $3218

Cashflow: -$760/month
Cash on Cash Annualized ROI: -12.2%

After rents are brought up to market levels
Monthly rent roll: $4500
Cashflow: $977/month
Cash on Cash Annualized ROI: 10.0%

Purchasing an I-bond at the current 9.72% yield clearly wins here.

[Archipelago]

3-plex:
(1) 2/2 unit
(2) 1/1 units
Listed price: $325k
25% downpayment = $81,250 @ 7% 30 year fixed
Closing costs: $5,000
Improvements: $15,000
ARV: Mayyyybe $370k on a good day?

Current monthly rent roll: $1250 (1 unit currently vacant)

P&I: $1622
Taxes: $553
Insurance: $200
Management: $125
2.3% vacancy: $29
CapEx: $268
Utilities: $50
Lawn and snow: $100
Repairs: $200
Expenses total: $3146

Cashflow: -$1896/month
Cash on Cash Annualized ROI: -18.8%

After rents are brought up to market levels
Monthly rent roll: $3800
Cashflow: $340/month
Cash on Cash Annualized ROI: 3.4%

Purchasing an I-bond at the current 9.72% yield clearly wins even more in this case. Big yikes.

[slugsworth]

But you can't buy $100k in I bonds. You also didn't include appreciation, which might help the numbers a bit.

[Archipelago]

But you can't buy $100k in I bonds. You also didn't include appreciation, which might help the numbers a bit.

You can't, I get that. It's not an apples-to-apples investments comparison.

With the direction interest rates are headed at the moment, it seems like depreciation is more likely than appreciation. There's no way RE can keep appreciating the way it has been the past few years while interest rates rise. It's simply not feasible.

[Midwest_Handlebar]

The market has slowed down a LOT where I live in the past 2 months. Small multifamily properties are finally availalble for the first time in 2 years, but they're overpriced and just sitting. I'm also pilling up money in I-bonds waiting for the market to make sense. We were able to add $70k in I-bonds over the last 9 months with buying for the 2 kids $20k, myself $20k, wife $10k and "gifting" my wife $20k. The gifting portion you buy now, start collecting at current rates, and gift in subsequent tax years. It adds up.