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Real Estate Deal Analysis & Advice

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Mike Hoffman
  • South Hackensack, NJ
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Looking for opinions - Would you consider this a good first deal?

Mike Hoffman
  • South Hackensack, NJ
Posted Jun 24 2017, 09:26

Hello BP

I'm a newbie looking to do my first deal.  I have someone looking to sell me an off market property and they are willing to carry the note.  They are moving and already have a new home purchased out of state.

This is a 2 family home located in Linden NJ

Sellar wants $380,000 for the property and because they owe $0 they are willing to carry the entire note at 4% on a 30 year amortization with just $10,000 down payment so amount financed will be $370,000

The owner has just renovated both units so the property is turnkey.

The rents in the area are approximately $2,000 for each unit 

So here is the breakdown:

P&I - $1,766

Taxes - $896

Insurance - $150

Vacancy - 5% $200

CapEx - 5% $200

Repairs - 5% $200

Tenants pay all utilities

Property will be self managed

Total Expenses - $3,412

Total Income - $4,000

Monthly Cash Flow of $588

Because the upfront cash required is so low the BP calculator shows Cash on Cash ROI - 56% and continues to increase year by year.

This appears to be a no brainer but as a newbie I'm obviously doubting my analysis.  Your help and comments would be greatly appreciated.

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