BRRRR Deal Analysis - Gloucester City, NJ

[Joe P.]

Hi all - hoping to have some feedback on this deal for Gloucester City, NJ

https://www.biggerpockets.com/brrrr-calc/1408045

This house is a 3/1 and I'm looking to purchase for $45,000, rehab for approximately $30,000, and refinance at an ARV of $110,000 (70% LTV - $77,000), which would cover purchase/rehab.

I'm worried its a bit tight with the cash flow, but I tried to be as conservative as possible with all estimates including growth of rents/area.

Would appreciate feedback!

[Richie Thomas]

@Joe P. I'd need to see the BiggerPockets PDF report summary from the calc page, but it sounds promising from your description.  In the meantime, I did some research on the area itself:

Gloucester City looks close to Philadelphia, which I'd guess is an asset as long as it's popular with commuters.  

Crime rate looks manageable, which is more relevant if this will be a rental and less so (but still important) if this will be a flip.

Population trend is disappointing, unfortunately- negative 1.2% since 2000, much less than I'd expect for a city that close to Philly.  Again, more important if this will be a rental.

Pretty small total population of 11,000-ish, meaning your pool of prospective tenants and/or buyers would be less than ideal.

Also a lower-than-average % of renters compared to the total population.

Finally, keep in mind that New Jersey is ranked as the state in the US with the highest property taxes.  Delaware is 35 minutes away and has 1/5th the tax rate.  Something to think about.