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?
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?
@Gal Alberman Your post lists the total annual income as being $42,800, but I think perhaps you meant that the total is $52,800. If so, you may want to edit your original post to correct this.
You have a $2,000 expense listed for a "super." Can you elaborate on what this is for?
With NOI of $25,940 an 8% cap rate would suggest an offer of $324,250 (without taking into account the deferred maintenance of $15,000 you mentioned.)
I think the question is whether the market in Irvington supports an 8% cap rate.
I know everyone is talking numbers - revenues, expenses, cap rate etc. But this is a 4-plex correct? Do you not check on recently sold comparable properties first?
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?
Hey Noel, all of the numbers I've put up are estimates by owner on the initial phone call. Of course there will be an in-depth check of all documents and bank statements or tax returns for the property. When numbers will take an accurate form I'll update the NOI and my offer accordingly. What I'm trying to figure out is an appropriate cap rate to multiply the accurate NOI with. I want to see if me and the owner are even at the same ballpark
About debt servicing - I will try to get financing but will figure this part out after determining the appropriate price
@Gal Alberman Your post lists the total annual income as being $42,800, but I think perhaps you meant that the total is $52,800. If so, you may want to edit your original post to correct this.
You have a $2,000 expense listed for a "super." Can you elaborate on what this is for?
With NOI of $25,940 an 8% cap rate would suggest an offer of $324,250 (without taking into account the deferred maintenance of $15,000 you mentioned.)
I think the question is whether the market in Irvington supports an 8% cap rate.
Hi Ryan,
yes I had a typo.. It is $52,800.
Anyway I'm from NYC and over here we use a superintendent to take care of garbage, cleaning and snow removal. It's usually around $2,000 yearly.
You got my question right. So 8% sounds about right.
I know everyone is talking numbers - revenues, expenses, cap rate etc. But this is a 4-plex correct? Do you not check on recently sold comparable properties first?
Cheers... Immanuel
Hi Immanuel, yes it's a fourplex.
To your question - first, I tried but didn't find any relevant comparables for this property.. Second I'm not looking to live there or flip it, so only the numbers will determine if it's a good deal