Should I buy this triplex in Kearny?
Hello All:
My question is this: am I fooling myself by thinking that it's still a good deal even if the cash flow is -$212/month, and the Cash on Cash ROI is -3%, because I probably won't need the 10% property management fees? If I take out this 10%, I get $100 cash flow and 1.3% CoC ROI.
Details:
I'm looking at a 3 family home in Kearny, New Jersey. I offered $270K, and was countered at $310K. There are 2 other offers, and I was told that I need to offer at least >$300K.
So let's say I purchase it for $305K. The gross rents are currently $3000, I believe I could at least get $3100. It looks like there won't be much need of repair -- I estimate $5000 at most.
All the utilities are split out for the 3 units, except for water, which is $200/quarter.
If I estimate 10% Vacancy, 10% repairs and maintenance, 5% capital expenditures, and 10% property management fees (I will mange it myself), I get NOI $11,362, cashflow -$212, CoC return of -3%
I believe it's in a good location/neighborhood, one that I wouldn't mind living in, and it's close to Newark Airport.
I would really appreciate your thoughts.