New to Real Estate · New Brunswick · Member since 2017 · 7 posts · 1 vote
I have been reading a lot recently about how hard it is to buy a property in New Jersey that produces adequate cash flow or even positive cash flow.
I am about to make an offer on a property in NJ and so this sentiment has me nervous. After running my own analysis I see this property is significantly cash flow positive but I can't help but feel i'm blatantly missing something. The numbers are as follows...
Offer Price: $275K
Units: 6
Rent per unit: $800 ($4,800 per month total)
Vacancy: $480 (10% of Gross rents); Maintenance and Repairs: $480 (10% of Gross Rents); Capex: $350; Taxes: $917; Insurance: $833
The tenants are paying for utilities separately so there's nothing budgeted for that. I am not sure what to expect for common area expenses to be fair.
Rental Property Investor · Northern NJ · Member since 2019 · 672 posts · 677 votes
6y
I'm not very familiar with New Brunswick and I assume the property is located there. The reason why people say that about NJ is because that price point is well below anything that isn't a full gut reno, especially at 6 units. Hell even 3 units at $275k is normally full gut.
What class area is this? I can only imagine it being a D- or else you found a screaming deal. In Newark, the worst area close to me, you can't find a 6 unit fully rented that cheap. Again even in that area a 6 unit rented out would be over $500k. So there's some factor you're leaving out in your description.