Union city, New Jersey buy and hold

[Michael Baffuto]

Hi All, I’m looking to purchase my first 3 family property in Union City, NJ. The home borders Weehawken which is one of the best areas for buy and hold in NJ. I’m a little concerned on a counter offer the listing agent made. We offered $705k and they want $729k. It’s not much but I’m worried because I can’t find comps in that area. As far as buying and holding the rent roll is decent and I’d break even every single month so not that great of a cap rate. Only putting 5% down so would love to get anyone’s feedback that is familiar with union city. Do we think the market will go up or down? Any help would be great. Thanks

[Basit Siddiqi]

@Michael Baffuto

$729,000 will likely be close to $750,000 when all closing costs are factored in. That comes out to $250,000 a unit.
Normally it is difficult to have positive cash-flow for a property once the unit costs above $200,000+.

Difficult but not impossible of course. The property while may not cash-flow positive may be more likely to increase in value than others. However, do you want to be in the cash-flow game or the appreciation game?