4 family in Irvington NJ

[Gal Alberman]

Hi all, would like to hear your opinion on this deal:

- Irvington NJ, at the southeast part

- 4 family, didn't see the place yet, owner says it's in "ok" condition meaning no fixing required yet. all units are month to month

INCOME: 3br ($1250) + 3*2br ($1050 each) = $42,800

EXPENSES (rounded):

Tax - $10,000

insurance - $3,000

water / sewer - $800

common electric - $500

heating and electric are seperated

my additions:

super - $2,000

maintenance 5% - 2640

vacancies 5% - 2640

management 10% - 5280

TOTAL -  $26,860

NOI = $25,940

How much CAP would you assume for this deal to determine the offer (let's say it needs 15K in update)?

[Noel Challenger]

Hey Gal, I see that you are very conservative on your numbers and that can lead to some hiccups later when you buy the property and you're paying more than what you accounted for initially. Irvington has some of the highest tax rates in North Jersey, I would account for more money just to set aside for property taxes. How much are the current owners paying in taxes now? Same with water and sewer,  you pay water by unit which is around 50/month per unit so you'd be paying 2400/year.

Also I noticed you didn't mention any debt servicing so I'm assuming you are paying cash for this property?