Not sure if good deal or bad...

3 Replies

hey fellow bpers!! I could use a little help if anyone feels so inclined. I am looking at potential buy and hold but not sure about numbers. At first glance I think maybe but want some experienced opinions as well.

Asking price...499k

Rent roll...4400month

Electric water and gas paid by tenants. Sewer by landlord at 1140 a year.

One tenant gets discount rent for groundskeeping.

Taxes...11065year(it's in Jersey so yes $11065.00 a year)

Capx...150month

Vacancy rate...3%

Any help would be greatly appreciated. Property is in decent area on border of good town and ok town but zipped into good town. Appreciation around 1.5%. 

Thanks everyone and anyone!

J

That seems like an awfully big project.  Have you had an inspection done yet?  With a property that large, I would worry about some repairs you might run into.  Also, curious what kind of financing you would be seeking for this one.  What city is it in?

@Justin Bush give us some more detail if you will.  Builing size, age, number of units, bed/bath per unit.  For guesstimate sake, I will assume your $4400 rent is 4 units at $1100.  3% vacancy is only 5 vacant weeks across all units, which seems extremely low.  Even if the building is in demand, you will have turnover time.  Speaking of which, you should factor in repair and turn costs which are not listed.  You have capex listed, but $1800 per year doesnt seem enough to fund all of the floor replacement, mechanicals, roof, etc.  All of that with your high taxes and you will likely find low returns on the cash you will have to put in.

thank you both for the quick responses...the property is a 3 unit with 2 in main house and 1 over garage which does have some potential to rent separate for extra income. Total square feet of rent space around 2600. I plan on exploring seller finance possibilities but property has only been owned since 2008 so not sur how much equity there. Could also go conventional but don't really want to use that much bread on it. @Derek B. what number would you feel better with offer?

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