Good deal or bad deal?

Question

Hello first time investor looking into a two family home in NJ I plan on living in one unit and renting out the other. Sale price is $280,000 and plan on offering full price because all I would have to do is install dryer and washer. Using a DPA grant for down payment. I will pay for closing. Rent will be in total of $2450 and mortgage is looking like $2182 meaning my cash flow would be $268. Is this a good deal?

Allan Szlafrok · Answer

@Sharissa P. After you’ve added all the expenses into your calculations if the the rental unit isn’t making it less expensive to own than it would be to rent a similar unit then it’s not really worth your while. Knowing the NJ market like I do I have a feeling like you’d be better off renting than owning in this instance but I could be wrong.

Sharissa P. · Answer

@Jason D. I sent you a private message

Sharissa P. · Answer

@Jason D. I have thought of all that you are right !

Jason D. · Answer

@Sharissa P. You need to figure expenses into your analysis. You'll have maintenance costs, vacancy from time to time, and large, infrequent capital expenses that need to be reserved for. That'll probably add an additional $400/mo. To your expenses. After adding that all in, I'd want an additional $400/mo cashflow.

Jason D. · Answer

@Sharissa P. I would need total rent to be in the $3000 range to be a deal for me

Sharissa P. · Answer

@Jason D. 2450 for both units the rent on the second unit is 1350 and could be increased

Jason D. · Answer

@Sharissa P. $2450 for the one unit while you live in the other, or $2450 for both units after you move out?

#1 is a great deal

#2 is a no go for me

Good deal or bad deal?

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