Updated about 6 years ago on . Most recent reply
Looking for insight on a 6 unit building
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Hi @Duane Brown, it's definitely in your interest to verify any numbers you receive from the landlord. Ask them for utility bills and check with the county to ensure they're accurate. Depending on the county, you may even be able to use those bills to look up the property on the county's online portal. This might give you access to multiple months' worth of bills, giving you insight into seasonal fluctuations. Access to these bills should be a condition of moving forward with the deal. Same with the landlord's copies of rent rolls, tenant credit reports and background checks, etc.
Also, when was the property built? If it's old (or even if it's not), it might be a good idea to pull building permits to see when it last had work done to the roof, plumbing, electrical, etc. If no permits were issued in the recent past, this could indicate that the useful life of those major expenses is nearing its end. In this case, you may want to bump up your CapEx + Repairs budget a bit higher, to around 20%. If the building is still pretty new, this is less of a concern, but if you're paranoid (like me) then you'll pull the permits anyway haha. If you do find something, this is useful information to bring to the seller to re-negotiate the purchase price, assuming it's part of your contingencies.
I'd +1 everything Jaysen said, especially about budgeting for a property manager.
Lastly, have you considered investing out-of-state? Delaware is an hour away from Ewing, NJ and has a property tax rate of 0.56%, the 6th-lowest in the nation. That beats the heck out of paying $918/month in taxes.