I'm looking into purchasing my first property, a multi-family house in Northern NJ to live in. My ideal scenario is to live here for a few years and eventually purchase a single family and keep this for rental income.
The house is currently vacant and already has 5 offers. It's been on the market for less than a week.
Here are the stats:
- List Price: $450,000
- Annual Taxes: $10,500
- Units: 2
- Rent Est Unit 1: $1500 (i would live in this unit)
- Rent Est Unit 2: $2500
Putting down 20% I estimate my PITI to be $2,771 (at 4.25%)
Positives on this property:
- Located in an "up and coming" part of town, where the town is in Phase 3 of a development program
- The second unit is two floors and has the bones/access to be split into two separate units with relatively minimal investment (basically adding a kitchen).. pending zoning approval of course
My concerns are that while the property certainly has potential, the current rent rolls are a lot more attractive in the 425k range than 450k.
Any thoughts/advice would be appreciated.
Hi Mark - On paper this does not seem bad, especially for something in Northern NJ. I do have a few questions though:
1. Does this "up and coming" part of town have easy access to trains and/or buses that go to NYC?
2. Are there any major improvements that would need to be done (besides possibly splitting the second unit into an additional unit) or is the property turnkey?
3. When you plan to move from this property and into an single family home, would you self manage or hire a management company?
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