I hope you're all doing well. I'm currently in the process of considering the purchase of a two-family rental property in the Jersey City area. The property in question is an older home that requires a significant amount of renovation to transform it into a proper two-family residence. My goal is to be able to rent each unit for approximately $2,500 per month.
The seller has set the asking price at $780,000, but I am aiming to negotiate the price down to around $720,000. My question is whether this proposed purchase price aligns with the potential rental income and if it makes sense as an investment for a rental property.
I appreciate any insights or advice you can provide on this matter. Your input would be valuable as I assess this potential investment opportunity.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
2y
The bigger pockets website has a search button (magnifying glass) in the top right corner of the page. I encourage you research, read, and learn about running numbers. Its an important step before buying investment property. You didn't provide any numbers to justify the purchase at $720k. Nobody can answer your question. Cheers.
I hope you're all doing well. I'm currently in the process of considering the purchase of a two-family rental property in the Jersey City area. The property in question is an older home that requires a significant amount of renovation to transform it into a proper two-family residence. My goal is to be able to rent each unit for approximately $2,500 per month.
The seller has set the asking price at $780,000, but I am aiming to negotiate the price down to around $720,000. My question is whether this proposed purchase price aligns with the potential rental income and if it makes sense as an investment for a rental property.
I appreciate any insights or advice you can provide on this matter. Your input would be valuable as I assess this potential investment opportunity.
Thank you for your assistance.
Hello Vinay, I will have to agree with Jaron on this one. Only you can answer this question by running the numbers. With a purchase price so large you need to know the major metrics before entertaining the offer. Also if you want advice from the community more information would be needed. You mentioned extensive rehab but did not provide the estimated rehab cost. You mentioned a potential $720K purchase price but did not specify why this is the value you want to pay. You mentioned the estimated rent payments but is that the market average or wishful thinking. You also did not mention down payment amount and expected PITI per month. This is all vital in understanding the full scope of the deal you are looking at. Once you have determined this information and looked at your cap rate, cash on cash return, expected growth rate of rent and property value and comps in the area then you should be able to have a better idea of is this is a good deal or not. I hope this helps and best of luck.