Investor · Brooklyn, NY · Member since 2016 · 226 posts · 45 votes
Dont know why this I am having a hard time wholesaling this deal, These number I did are conservative For example 5 Percent interest rate, Needs almost no repairs and is fully occupied And cash flowing great location next to brooklyn and beow market rents that means room to grow :(
How did you generate your totals for things like water and electric? In my area, at least, they seem pretty low. Are these actual operating expenses, or pro forma numbers?
@Tzvi Balsam Where is it located? That's a really good rent to price ratio. How many units? I'd be wondering where the "other income" comes from. Also, the taxes are really high, the management fee is a bit low and is there no charge for gas?
Okay, well, that's part of it - it's in NJ. I don't know that market at all. But at 6 units you'd need a commercial mortgage so you're unlikely to get rates like that - a traditional bank probably won't lend to you without a track record so you'll end up with like a 6-7% rate and a 25 or 30 year amortization. And in NYC at least, 6 unit buildings are subject to rent stabilization which meant last year you couldn't raise the rent. Limits growth.
But you'll want to talk to people who know Jersey. You can't advertise that as being near Brooklyn and expect that to work.
On the surface, this looks like it could be a solid deal for the right buyer, though I'm not well versed on rent control laws in Bayonne or how that would affect this. If your plan is to wholesale the deal, do you have a buyer's list that caters to this type of buyer?
Ignoring the rent control situation for the time being, do you know how far off the current rents are from market? And the building's unit mix?
Also, I agree with @Adam K. that you shouldn't be advertising Bayonne as "near Brooklyn". While they're not far from one another on the map, they're a world apart in terms of market dynamics. Local investors will know that and won't want to be misled on the location.
Those number don't look bad at all. I agree with the individual on the mortgage rate for a commercial loan will be higher. But everything else look solid. I don't deal with commercial properties but I know an individual who is buys out in that area. I don't mind pointing you in his direction. Pm the details.