Can't seem to get cashflow
Hi all -
I've been looking at multi families in the Ironbound section of Newark for the past couple of months, and every time I find something I think will work, when I use the BP calculator to determine if it will cash flow it always comes back negative. I just left a property today that seems like it SHOULD work, but still isn't so I wanted to get everyone's opinion on if I'm doing this right:
Price: $235K (asking is $175, but rolling in $60K worth of renos to mortgage)
ARV: $235K
Down Payment: $8,225 (3.5% using FHA)
Rent: TOTAL: $2150 (1 BR - $850, 2BR - $1300)
I was accounting for 3% vacancy rate, 10% mgmt fee, and 5% cap ex. I plan on living in the one bedroom unit and renting out the 2BR, so won't be needing mgmt right away, but wanted to budget for that for down the line.
When I run this, it has a negative cash flow of $140/mo. Does this sound right to everyone? Any advice would be appreciated!