New Jersey 6 unit Deal Analysis / Cash Flow vs Appreciation

[Jonathan Joyce]

https://www.biggerpockets.com/...

Hi
Looking for some feedback on this deal. 6 units Section 8 total rent of $7,900.  After checking fair market rent they are in total about $1,500 under fair market. I’m aware of the limitations on yearly rent increases.  I am waiting on leases to see when they renew so I can forcast when we will be able to request for adjustments. 

Before I go any further on this I’m struggling with cash flow. This property is in a Nj shore town that is on an upward trajectory, one of the last “affordable” beach towns. I know there is a balance between appreciation and cash flow and it could tip one way or the other. 

Looking for some guidance…I think this may be as low as I can go on an offer for this place.  

I’ve been looking in this area for a while and can’t find anything that cash flows. What is everyone’s thoughts on cash flow vs application? 

[Ariela H.]

In first glance it is concerning to see negative cash flow and an underestimate of your fixed expenses like utilities. I would think you would want to be conservative on these numbers and get actual bills from the current owner. Just my two cents!  Good luck!