Newbie evaluating first deal in Newark, NJ

4 Replies

Hi BP'ers,

I have made my first foray into the world and spoken to a seller on a property  I am looking for Buy & Hold Cash flow- below are the basic stats,; any advice, thoughts are appreciated- what questions should I ask before paying for an inspection, has anyone invested in this area- Newark, NJ?  Thank you!

Listed for $195,500

Multi family home built 1910 (yikes!)

2 apartments and two renters who have been in place for a long time

1st floor 1 bedroom 3 years 

2nd floor 2 bedroom 10 years – section 8

$1700  total in rent

Already section 8 approved

Seller is retiring. Investor who lives in PA. Looking for buy-out, rather than income

Put in a new water heater. Normal painting, carpeting, just redid the backyard put down new sod. Yearly contract with landscaper.

Taxes a little over 3k annual.

This looks like a dog at the asking price but maybe at 95-125k?

Thanks!

Rents are too low. 2 fams in Newark, unless are in decent areas like North newark (upper roseville section and has parking), ironbound, etc. are being evaluated primarily using their rents. You're paying way too much for this property. Your 95-125k number sounds about right.

Thanks Ibrahim,

Your vast experience with NJ real estate makes me trust your judgement. I look forward to staying in touch. 

@Bruce Faulk

I'd skip any place that requires much more than a weekly lawn mowing unless it's bringing in a small fortune.  I loathe getting my spring clean up bill from my PM, it's alway a couple hundred bucks and, while necessary, annoying.

You'll want to start as close to the 2% rule as possible, so about $85k this place would be a steal.  But it will probably be a solid money maker at $120k.

thanks for the advice Aaron- what about the age of the property?  Do you invest in homes over 100 years old?

Thanks again

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